Suppose the Fed buys $1 billion worth of bonds and the required reserve ratio is 20%. In the theoretical limit, the money supply could
A) decrease by $1 billion.
B) increase by $1 billion.
C) increase by $5 billion.
D) decrease by $5 billion.
C
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One point on a PPF shows production levels at 50 tons of coffee and 100 tons of bananas. Remaining on the PPF, an increase of banana production to 140 tons shows coffee production at 30 tons
Still remaining on the PPF, coffee production at 10 tons allows banana production at 160 tons. The opportunity cost of a ton of bananas is A) constant because coffee production decreased by the same amount each time. B) decreasing, since the increase in banana production is less at each point considered. C) 16 to 1, that is every 1 ton of coffee given up will result in 16 more tons of bananas. D) increasing from 1/2 ton of coffee per ton of bananas to 1 ton of coffee per ton of bananas.
Suppose a patent is granted for a product that has the linear demand curve P = a - b Q. The constant marginal cost of producing this product is $50 per unit, a unit sells for $150, and consumers purchase 100 units of the good at that price
If the monopoly is maximizing profit, b equals A) 1. B) 1.5. C) 2. D) 2.5.
If consumers were able to receive the full social benefits associated with the consumption of goods involving positive externalities, other things being equal, there would probably be: a. an increase in consumption
b. a decrease in consumption. c. a greater misallocation of resources. d. a decrease in the market price of the product.
Which of the following market structures is considered imperfectly competitive?
A. Monopolistic competition B. Perfect competition C. Monopoly D. All of these are considered imperfectly competitive.