Banks decide to raise the interest rate they pay on checking accounts from 1% to 2%. This action would
A. decrease money demand, shifting the LM curve up and to the left.
B. increase money demand, shifting the LM curve down and to the right.
C. decrease money demand, shifting the LM curve down and to the right.
D. increase money demand, shifting the LM curve up and to the left.
Answer: D
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Comment on the following statement. "Taxing externality-producing activities may not eliminate damages."
What will be an ideal response?
If a monopolist is producing the quantity at which marginal revenue equals marginal cost, it should
A) continue to produce this amount if it wants to maximize profits. B) reduce output if it wants to maximize profits. C) increase price and keep output unchanged if it wants to maximize profits. D) increase output if it wants to maximize profits.
Which of the following would not violate the Sherman Antitrust Act if the rule of reason was used to interpret the act?
a. conspiring to monopolize b. formation of a trust company c. conspiring to restrain trade d. a single firm supplying all of a market with no close substitutes and some barriers to entry e. attempting to restrain trade with a foreign nation
The current account in the BOP records:
a. all money flowing between countries. b. a nation's yearly exports and imports of goods and services. c. only the transactions involving capital goods in international trade. d. only the transactions involving consumer goods in international trade. e. only those goods and services purchased on credit in international transactions.