If the Fed purchases $100,000 in government bonds from a bank, then the
A. liabilities of the bank rise by $100,000.
B. reserves of the bank fall by $100,000.
C. reserves of the bank rise by $100,000.
D. assets of the bank rise by $100,000.
Answer: C
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Suppose Spam is an inferior good. If the U.S. economy hit bad times, and demanders' incomes were to fall, which of the following would tend to occur?
A) Spam sales would increase. B) Spam demand would decrease. C) The price of Spam would increase. D) Both A and C above. E) Both B and C above.
A decrease in the U.S. balance-of-payments surplus results when
a. Canadian citizens increase their shopping trips to the United States. b. more U.S. citizens vacation in Chile. c. French citizens stop buying Perrier and start buying U.S. mineral water instead. d. the United States sells oil-drilling equipment to China.
According to the efficient market hypothesis, which of the following statements is not correct?
a. Stock market prices tend to rise today if they rose yesterday. b. As judged by the typical person in the market, all stocks are fairly valued all the time. c. At the market price, the number of shares being offered for sale matches the number of shares people want to buy. d. All of the above statements are incorrect.
Which of the following is NOT an example of a transaction cost?
A) the enjoyment of owning the good B) the opportunity cost of time spent looking for stores that sold the good desired C) the cost of returning a defective product D) time spent bargaining over the price of a good