In the markets for goods and services in the circular-flow diagram,
a. households and firms are both buyers.
b. households and firms are both sellers.
c. households are buyers and firms are sellers.
d. households are sellers and firms are buyers.
c
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Refer to Scenario 2. What is the estimated regression equation for determining the market value of houses?
What will be an ideal response?
A piece of land is divided between John and Mary. However, only John gets the title to his share of land. Which of the following is true?
a. Both Mary and John will not take care of their lands. b. Mary will have a higher per capita output from her piece of land. c. John will not be able to rent out a portion of his land. d. Mary will have a greater incentive than John to invest in her piece of land. e. John will be able to use his land as collateral for a loan from a bank.
Suppose the inflation rate has been 6 percent over the past four years. If the Federal Reserve announces an increase in the growth of the money supply, adaptive expectations would predict an inflation rate of 6 percent
a. True b. False Indicate whether the statement is true or false
If the Fed raises the discount rate, what happens to reserves and the money supply?
a. Reserves increase and the money supply decreases. b. Both increase. c. Reserves decrease and the money supply increases. d. Both decrease.