As a result of an increase in the money supply, some banks may end up with excess reserves. What is the likely result?
A. Banks will spend the excess reserves by paying their employees more.
B. Banks will raise interest rates.
C. Banks will make more loans, thereby contributing to a decrease in aggregate demand.
D. Banks will make more loans, thereby contributing to an increase in aggregate demand.
Answer: D
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The current slowdown in productivity growth afflicting most of the industrialized countries is commonly thought to have begun around
A) 1897. B) 1929. C) 1948. D) 1973. E) 1984.
An American company operates a fast food restaurant in Paris, France. Which of the following statements is accurate?
a. The value of the goods and services produced by the restaurant is included in both French GDP and U.S. GDP. b. The value added by American workers and equipment in France is included in U.S. GDP and the value added by French workers and equipment is added to French GDP. c. The value of the goods and services produced by the restaurant is included in French GDP, but not in U.S. GDP. d. The value of the goods and services produced by the restaurant is included in U.S. GDP, but not in French GDP.
When output is 50, fixed costs are $1,000, and variable costs are $2,000, what is the average total cost?
A. $20 B. $60 C. $40 D. $80
One way the government can boost the economy out of a recession is:
A. with public announcements telling the public to save their money. B. by increasing government spending. C. by setting price ceilings on most goods so people can afford them. D. None of these will help an economy in recession.