The purchase of Treasury securities by the Federal Reserve will, in general
A) not change the money supply.
B) not change the quantity of reserves held by banks.
C) increase the quantity of reserves held by banks.
D) decrease the quantity of reserves held by banks.
Answer: C
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Holding supply constant, a reduction in demand leads to
A) lower prices and higher quantity supplied. B) lower prices and lower quantity supplied. C) higher prices and higher quantity supplied. D) higher prices and lower quantity supplied.
As the price of a good increases:
a. that good will yield less satisfaction per dollar than before. b. consumers will have more real income to spend on other goods. c. the quantity demanded of that good will also increase. d. the utility-maximizing quantity of that good willl not change. e. consumers will buy the good and substitute away from other goods.
From a Keynesian point of view, which is more likely to cause a recession: aggregate demand or aggregate supply. Why?
What will be an ideal response?
An individual has an absolute advantage in producing pizzas if that individual:
A. charges the lowest price for pizzas. B. has a higher opportunity cost of producing pizzas than anyone else. C. has a lower opportunity cost of producing pizzas than anyone else. D. can produce more pizzas in a given amount of time than anyone else.