Henry deposits $2,000 in currency in the First Street Bank. Later that same day Jane Harris negotiates a loan for $5,400 at the same bank. After these transactions, the supply of money has
A. decreased by $3,300.
B. increased by $2,100.
C. increased by $3,300.
D. increased by $5,400.
Answer: D
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Perfectly elastic demand is represented by a demand curve that
A) is vertical. B) is horizontal. C) has a 45° slope. D) is a rectangular hyperbola.
The expected real interest rate (r) is equal to
A) nominal interest rate minus inflation rate. B) nominal interest rate minus expected inflation rate. C) expected nominal interest rate minus inflation rate. D) nominal interest rate plus expected inflation rate.
A major goal of federal government policy is to eliminate frictional unemployment
a. True b. False Indicate whether the statement is true or false
Suppose there are two countries (Home and Foreign) that produce two goods. Home's wages are 100% greater than Foreign's wages. Will trade be possible between Home and Foreign?
a. No, because Foreign's wages are lower than Home's wages. b. Yes, Foreign will be able to export both products to Home. c. Yes, as long as Home's marginal productivity of labor in one product is at least 100% higher than Foreign's marginal productivity of labor in the same product. d. No, because prices will be the same in each country.