If the Fed wishes to increase nominal interest rates, it must engage in an open market ________ of bonds that ________ the money supply.
A. sale; does not change
B. sale; increases
C. sale; decreases
D. purchase; increases
Answer: C
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If with a small decrease in the price of a good, the quantity supplied falls to zero, the supply of the good is said to be:
A) unit elastic. B) inelastic. C) perfectly inelastic. D) perfectly elastic.
In the opening of free trade, if world prices of a good are less than domestic prices of that same good,
a. domestic consumers will experience a loss of surplus. b. domestic prices will drop to the world price level. c. all domestic producers of that good will try to find another market because they can't compete with foreign producers. d. domestic producers will increase the quantity supplied in order to crowd out the foreign-produced good.
A tax on the wages that a firm pays its workers is called
a. an income tax. b. an excise tax. c. a consumption tax. d. a payroll tax.
In the market for money, the behavior of savers is represented by the
A. supply curve. B. demand curve. C. a combination of the supply and demand curves. D. neither the supply curve nor the demand curve.