In Adam Smith's competitive market economy, the question of what goods to produce is determined by the:
a. "invisible hand" of public interest.
b. "invisible hand" of government.
c. "visible hand" of laws and regulations.
d. "invisible hand" of the price system.
d
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If the Fed purchases $50,000 in T-bills from a bank, by how much will the bank's excess reserves increase?
A) by $50,000 B) by $50,000 times the required reserve ratio C) by $50,000 divided by the required reserve ratio D) Not enough information has been provided to answer the question.
If the annual interest rate is 4 percent, a consumer who spends $100 today
a. will have to pay back $104 to the bank b. would have to pay $104 next year to get the same goods c. will receive $96 from the bank next year d. would have to pay $96 next year to get the same goods e. is giving up the ability to spend $104 on goods next year
Creating a competitive and legal market for human organs for transplant would make the:
A. Supply curve vertical for such organs B. Demand curve vertical for such organs C. Supply curve slope upward to the right for such organs D. Demand curve slope upward to the right for such organs
If a government wants to pursue an expansionary fiscal policy, then a tax cut of a certain size will be more expansionary when the:
A. Economy's MPS is small B. Economy's MPS is large C. Economy's MPC is small D. Unemployment rate is low