If the Fed wishes to increase the money supply then it should:
a. increase the required reserve ratio.
b. increase the discount rate.
c. buy government securities on the open market.
d. do any of these.
c
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What is meant by the term "marginal analysis"? Suppose an individual has to choose between renting four apartments at different distances from his place of work
The individual has to commute to work on five days of the week and as such will require different quantities of gasoline depending on the apartment he decides to rent. The monthly rents and expected gasoline consumption from each of the apartments is shown in the table below. If the price of gasoline is $5 per gallon, using marginal analysis, determine the optimum choice for the individual. Which principal is used for this optimization? What does it state? Apartment Gasoline Consumption (gallons per month) Rent ($ per month) 1 5 1,100 2 10 1,000 3 15 960 4 20 940
Studying the effects choices have on the individual markets within the economy is part of
A) scarcity. B) microeconomics. C) macroeconomics. D) incentives.
What is a market failure?
A) It refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit equals marginal private cost. B) It refers to a breakdown in a market economy because of widespread corruption in government. C) It refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit equals marginal social cost. D) It refers to a situation where an entire sector of the economy (for example, the airline industry) collapses because of some unforeseen event.
In order to sell an additional unit of its product, a monopolist must decrease price on all units
a. True b. False