If banks switch from holding reserves to holding cash, the policy impact of a negative deposit rate would be:
A. expansionary.
B. contractionary.
C. indeterminate.
D. negligible.
Answer: B
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According to the textbook, the Fed's information is fairly imprecise in regards to all of these things except:
A. actual real GDP B. potential GDP C. size of output gaps D. speed of the effects of its actions
A monopolist's goal is to maximize profit
Indicate whether the statement is true or false
The value of a loan of $500 after a year at 3 percent interest is:
A. $509. B. $1,500. C. $515. D. $565.
The market for gasoline in May is in equilibrium, at a market clearing price of $2.50 per gallon. After Memorial Day, the demand curve for gasoline increases, which causes
A) the demand curve for gasoline to shift to the right, creating a shortage at $2.50 per gallon which causes the market clearing price of gasoline to rise. B) the demand curve for gasoline to shift to the right, creating a shortage at $2.50 per gallon which causes the market clearing price of gasoline to fall. C) the demand curve for gasoline to shift to the left, creating a shortage at $2.50 per gallon which causes the market clearing price of gasoline to rise. D) the demand curve for gasoline to shift to the left, creating a shortage at $2.50 per gallon which causes the market clearing price of gasoline to fall.