The Fed can attempt to decrease the federal funds rate by
A) lowering the reserve requirement, which increases the money supply.
B) lowering the reserve requirement, which decreases the money supply.
C) raising the reserve requirement, which increases the money supply.
D) raising the reserve requirement, which decreases the money supply.
A
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Suppose that producers are richer than consumers. Is a price support program fair? Explain your answer
What will be an ideal response?
Price discrimination adds to social welfare in the form of (i) increased total surplus. (ii) reduced costs of production. (iii) increased consumer surplus
a. (i) only b. (i) and (ii) only c. (i) and (iii) only d. (i), (ii), and (iii)
Which of the following transactions is not included in GDP?
a. oranges sold to households by a grocer. b. orange juice sold by a restaurant to its diners. c. oranges sold by a farmer to a grocery store. d. All of the above are included in GDP.
How much is induced consumption when disposable income is $4 trillion?
A. 0
B. $1 trillion
C. $2 trillion
D. $2.5 trillion