The Fed sells $1 million in bonds to a bond dealer. The bond dealer's bank experiences
A. a decrease in assets of $1 million as its reserves decrease and a decrease in liabilities of $1 million as its deposits fall.
B. an increase in assets of $1 million as its deposits fell by $1 million, and a decrease in liabilities as its reserves fell by $1 million.
C. no change in assets or liabilities.
D. a decrease in assets of $1 million as its reserves decrease and an increase in liabilities of $1 million as its deposits rise.
Answer: A
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If U.S. prices increase relative to the rest of the world, we would expect imports:
A. to increase and exports to fall. B. to decrease and exports to increase. C. as well as exports to increase. D. as well as exports to decrease.
For the U.S. economy, which of the following is the most important reason for the downward slope of the aggregate-demand curve?
a. the wealth effect b. the interest-rate effect c. the exchange-rate effect d. the real-wage effect
What is the most likely result when the price of a good with elastic demand is raised by 10 percent?
(A) The quantity sold will decrease by 15 percent. (B) The quantity sold will increase by 10 percent. (C) The quantity sold will decrease by 10 percent. (D) The quantity sold will decrease by 5 percent.
Exhibit 2-4 Production possibilities curve data A B C D E Capital goods 0 10 20 30 40 Consumer goods200 180 140 80 0 In Exhibit 2-4, if the economy chooses production possibility D rather than production possibility B, it can expect
A. less growth in the future because it will use up its consumer goods. B. more growth in the future because of the accumulation of capital. C. the same amount of growth in the future but with a lower standard of living. D. the same amount of growth in the future but with a higher standard of living.