If all prices fall and it is observed that Betty purchases more bananas, which of the following statements can be made?
a. Betty purchases more bananas as the price of bananas falls, ceteris paribus.
b. Betty purchases more of all goods as their prices fall, ceteris paribus.
c. Betty prefers bananas to all other fruits, ceteris paribus.
d. There is no ceteris paribus condition in this statement.
e. Betty will always buy more bananas when all prices fall, ceteris paribus.
D
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When the reserve requirement is increased, the excess reserves of member banks are ________.
A. reduced, but the multiple by which the commercial banking system can lend is unaffected B. reduced and the multiple by which the commercial banking system can lend is reduced C. reduced and the multiple by which the commercial banking system can lend is increased D. increased and the multiple by which the commercial banking system can lend is increased
Which of the following lowers the equilibrium price of a canoe?
A) an increase in the supply of canoes B) an increase in the demand for canoes C) an increase in the quantity of canoes supplied D) a decrease in the supply of canoes E) Both answers A and B are correct.
Refer to the above figure. If the economy is currently operating at point C, then there is
A) a stable long-run equilibrium situation. B) a recessionary gap. C) an inflationary gap. D) unemployment.
After a hurricane in Florida knocked out the regional water supply for several days, the demand for bottled water increased sharply. In a market economy, how will this increase in demand affect the equilibrium price and quantity of bottled water?
a. Price will increase, and quantity will decrease. b. Price will decrease, and quantity will decrease. c. Price will decrease, and quantity will increase. d. Price will increase, and quantity will increase.