In the United States today, money consists of
What will be an ideal response?
currency and deposits at banks.
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When the economy is at full employment and inflation is present, the government could create a surplus budget by cutting its own spending and raising taxes. The Fed would be expected to:
a. reduce the required reserve ratio, increase the discount rate, and buy securities on the open market. b. reduce the required reserve ratio, reduce the discount rate, and sell securities on the open market. c. reduce the required reserve ratio, reduce the discount rate, and buy securities on the open market. d. increase the required reserve ratio, reduce the discount rate, and sell securities on the open market. e. increase the required reserve ratio, increase the discount rate, and sell securities on the open market.
A group of buyers and sellers with the potential to trade with each other is known as a(n)
a. trading bloc b. cartel c. market d. industry e. sector
Which of the following is true about perfect competition?
a. Each firm faces a downward-sloping demand curve. b. Each firm must face a horizontal demand curve. c. Firms are price-makers. d. Marginal cost equals average cost. e. Firms can increase sales by lowering their price.
Marginal revenue for a monopolist
A. decreases as price decreases because each unit of the good is being sold for a lower price. B. increases as output increases because demand is inelastic. C. is constant and equal to price. D. increases as price decreases because more people are willing and able to purchase the good at a lower price.