When the Fed raises the discount rate, it:
a. lowers the cost of borrowing from the Fed, encouraging banks to make loans to the general public.
b. raises the cost of borrowing from the Fed, discouraging banks from making loans to the general public.
c. increases the amount of excess reserves that banks hold, encouraging them to make loans to the general public.
d. increases the amount of excess reserves that banks hold, discouraging them from making loans to the general public.
e. decreases the amount of excess reserves that banks hold, discouraging them from making loans to the general public.
b
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The price elasticity of demand for electricity is -0.40. By how much must the price of the electricity decrease in order for sales to rise by 12%?
a. 3%. b. 4.8%. c. 12.4%. d. 30%.
The law of diminishing marginal returns in a manufacturing plant of a fixed capacity implies that, eventually, employing
A. one less worker will decrease the average product per worker. B. one less worker will not affect the average product per worker. C. one more worker will increase the average product per worker. D. one more worker will decrease the average product per worker.
Which one of the following does NOT contribute to economic growth?
A) increases in the price level B) the growth of capital and labor productivity C) the growth of the labor force D) the growth of the capital stock
Which of the following is likely to happen if the government increases its expenditure?
A) Price level will fall. B) Investment will decrease. C) Unemployment will increase. D) Consumption will increase.