The law of supply states that, other things equal, when the price of a good
a. falls, the supply of the good rises.
b. rises, the quantity supplied of the good rises.
c. rises, the supply of the good falls.
d. falls, the quantity supplied of the good rises.
b
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For a borrower, an increase in the real interest rate
A) definitely reduces current consumption and increases future consumption. B) reduces current consumption and has an uncertain effect on future consumption. C) has an uncertain effect on current consumption and increases future consumption. D) has an uncertain effect on both current and future consumption.
A country benefits from trade if it is able to obtain a good from a foreign country:
a. that has a very low domestic demand. b. the production of which requires a steady supply of unskilled labor. c. by giving up less of other goods than it would have to give up to obtain the good at home. d. by giving up more of other goods than it would have to give up to obtain the good at home. e. that has a substantial number of substitutes in the domestic market.
In the short run, an unanticipated shift to a more restrictive monetary policy is most likely to result in
a. a decrease in short-term interest rates. b. a reduction in the growth rate of real GDP. c. an increase in the rate of inflation. d. an increase in employment.
The simple deposit multiplier is
A) the reciprocal of the required reserve ratio. B) always 1. C) the same as the required reserve ratio. D) different from bank to bank even if the required reserve ratio is the same for all banks.