Everything else held constant, when bonds become less widely traded, and as a consequence the market becomes less liquid, the demand curve for bonds shifts to the ________ and the interest rate ________
A) right; rises
B) right; falls
C) left; falls
D) left; rises
D
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The number of dollars that the commercial banking system can add to the money supply for each dollar of new reserves created by the Fed
A) cannot legally be greater than 8 nor less than 2. B) is governed largely by reserve requirements and the form in which the public chooses to hold money. C) is less than one because a portion of new reserves must be retained in bank vaults or on deposit with the Fed. D) would increase if the public decided to transfer the amounts currently in commercial bank savings accounts into checking accounts.
The above figure depicts the Edgeworth box for two individuals, Al and Bruce. Point a is NOT Pareto efficient because
A) Al's MRS exceeds Bruce's MRS. B) the point is not near the center of the box. C) Al's indifference curve is not far enough away from the origin. D) All of the above.
The investment demand curve portrays an inverse (negative) relationship between:
A. investment and real GDP. B. the real interest rate and investment. C. the nominal interest rate and investment. D. the price level and investment.
Let the production function be q = ALaKb. The function exhibits increasing returns to scale if
A) a + b = 1. B) a + b > 1. C) a + b < 1. D) Cannot be determined with the information given.