When the Federal Reserve sells treasury securities in the open market,
A. The buyers of these securities pay for them with checks and bank reserves fall
B. The buyers of such securities by new securities in the open market and there is a decrease in bank reserves
C. The sellers of such securities deposit the funds in their banks and bank reserves decrease
Ans: A. The buyers of these securities pay for them with checks and bank reserves fall
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The slope of the budget constraint:
A) changes as the marginal rate of substitution changes. B) is the ratio of the prices of the two goods. C) is the ratio of the budget to total utility. D) equals one, since the consumer can purchase any combination along the budget constraint.
The principal-agent problem of ownership vs. control of the corporation tends to get worse when
A) stock in a corporation is held exclusively by a small number of people who control the company's day-to-day operations. B) stock in the company is tightly held, but there are some "outsider" stockholders. C) stock in the company is very diffusely held, with no individual or group having control over a large block of stock. D) managers have profit-sharing schemes as part of their incentive package. E) managers focus on maximizing the firm's profits, rather than the firm's market share.
If expansionary monetary policy reduces real interest rates in the United States, which of the following is most likely to occur?
a. Net foreign investment will decline, causing the dollar to depreciate and net exports to increase. b. Net foreign investment will decline, causing the dollar to appreciate and net exports to decrease. c. Net foreign investment will increase, causing the dollar to appreciate and net exports to decline. d. Net foreign investment will increase, causing the dollar to depreciate and net exports to increase.
When __________________, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right.
A. prices rise B. equilibrium is achieved C. costs of production fall D. there is a population increase