When the demand and supply of grapes both increase by the same magnitude, we can predict that the:
a. price of grapes will not change
b. quantity of grapes exchanged will fall.
c. quantity of grapes exchanged will rise.
d. Both a. and c. are correct.
d
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Suppose a bank has $1 million in deposits, a reserve ratio of 25 percent, and reserves of $250,000. This bank has excess reserves of
A) $250,000. B) $125,000. C) $62,500. D) $0.
Limit pricing refers to
A) the fact that a monopoly firm always sets the highest price possible. B) how the price is determined in a kinked demand curve model of oligopoly. C) a situation in which a firm might lower its price to keep potential competitors from entering its market. D) none of the above.
The circular flow of income shows that GDP can be measured as the sum of wages, interest, rent, and profits received by households or total expenditures on goods and services by households, firms, government, and the rest of the world
Indicate whether the statement is true or false
The Fed primarily uses the reserve requirement to control the money supply
a. True b. False Indicate whether the statement is true or false