Which of the following occurs in the factor market?
A) households exchange resources for goods and services.
B) firms exchange money for resources.
C) firms exchange goods and services for resources.
D) households exchange money for goods and services.
B
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Suppose that the price elasticity of supply for oil is 0.1. Then, if the price of oil rises by 20 percent, the quantity of oil supplied will increase
A) by 200 percent. B) by 20 percent. C) by 2 percent. D) by 0.2 percent.
Explain how the decision by parents to not immunize their children, hoping that their children will not get sick because other parents have had their children immunized, is an example of free riding. How is this behavior dangerous to the public?
What will be an ideal response?
The quantity of reserves supplied increases as interest rates rise because
a. the Treasury borrows more at higher interest rates. b. consumers don't want to borrow as much so more money is left in banks. c. as interest rates rise, banks fear losses so they decrease lending. d. banks find it more profitable to loan out excess reserves to other banks.
If we consider the relationship between the opportunity cost of holding money and velocity that existed in the 1980s, if the Fed followed the same policymaking in the 1990s and 2000s, would they have achieved the desired results? Explain.
What will be an ideal response?