When a bank sells a bond to the Fed
A. its liabilities decrease.
B. its liabilities increase.
C. its reserves initially increase.
D. its reserves initially decrease.
Answer: C
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A principal feature of a command economy is that
Club goods differ from pure private goods in that
A) club goods are nonexcludable while pure private goods are excludable. B) club goods are excludable while pure private goods are nonexcludable. C) club goods are nonrival while pure private goods are rival. D) club goods are nonexcludable while pure private goods are excludable.
Which of the following policies might create demand-pull inflation?
A. An increase in taxes B. An increase government spending C. An increase in interest rates D. All of these policies could create demand-pull inflation
Adam has 3 apples and 3 oranges. Eve has 2 apples and 2 oranges. The marginal utilities for Adam and Eve are summarized in the above table. Adam asks Eve to exchange one of her apples for an orange.
A. Eve will be willing to make the exchange, because her total satisfaction will remain unchanged. B. Eve will be unwilling to make the exchange, because she loses 15 utils of satisfaction. C. Eve will be unwilling to make the exchange, because she loses 5 utils of satisfaction. D. Eve will be willing to make the exchange, because her total satisfaction will increase.