Suppose the demand for rental apartments decreased substantially. We would expect to observe
A) no change in rent and a sharp reduction in quantity supplied in the short run, and an even larger decrease in quantity supplied in the long run.
B) a large decrease in quantity supplied in the short run, followed by a counter-reaction and an increase in quantity supplied in the long run.
C) a small decrease in quantity supplied and significantly lower rents in the short run, and quantity supplied to decrease much more in the long run.
D) a large decrease in quantity supplied in the short run and the long run, but much larger reductions in rent in the long run.
C
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Air pollution is an external cost because it
A) is a pollution of the external environment. B) is a cost not borne by the producer of the good. C) benefits no one. D) is not associated with resource use. E) is created only when production occurs.
When a bank receives deposits,
A) it must hold the entire amount as reserves in case of withdrawal. B) the Fed requires it to hold only a small percentage as reserves. C) it and it alone decides how much it will hold as reserves. D) its liabilities increase in amount but its assets do not change. E) its assets increase in amount but its liabilities do not change.
If the Fed wants to lower the interest rate, it will
a. buy bonds and decrease the money supply. b. buy bonds and increase the money supply. c. sell bonds and decrease the money supply. d. sell bonds and increase the money supply. e. sell bonds and decrease money demand.
About 1 out of every _____ black Americans is poor.
A. 12 B. 7 C. 4 D. 2