Suppose the Federal Reserve announces that it will be making a change to a key interest rate to decrease the money supply. This is likely because the Federal Reserve is
a. worried about inflation.
b. worried about unemployment.
c. hoping to increase the demand for goods and services.
d. worried that the economy is growing too slowly.
a
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In Macroland, currency held by the public is 2,000 econs, bank reserves are 300 econs, and the desired reserve/deposit ratio is 10%. If the Central Bank prints an additional 200 econs and uses this new currency to buy government bonds from the public, the money supply in Macroland will increase from ________ econs to ________ econs, assuming that the public does not wish to change the amount of currency it holds.
A. 5,000; 7,000 B. 20,000; 22,000 C. 5,000; 2,000 D. 3,000; 5,000
All other things being equal, the __________ the percentage of one's budget spent on a good, the __________ the price elasticity of demand.
A) greater; higher B) smaller; lower C) greater; lower D) smaller; higher E) a and b
What would be the economic dangers of eliminating patent protection in the pharmaceutical industry as a means of "eliminating monopoly power"?
What will be an ideal response?
Soo Jin shares a one-bedroom apartment with her classmate. Her share of the rent is $700 per month. She is considering moving to a studio apartment which she will not have to share with anyone. The studio apartment rents for $950 per month
Recently, you ran into Soo Jin on campus and she tells you that she has moved into the studio apartment. Soo Jin is as rational as any other person. As an economics student, you rightly conclude that A) Soo Jin figures that the additional benefit of having her own place (as opposed to sharing) is at least $250. B) Soo Jin did not have a choice; her roommate was a slob. C) Soo Jin figures that the additional benefit of having her own place (as opposed to sharing) is at least $950. D) the cost of having one's own space outweighs the benefits.