Sue's Bagel Shop wants to estimate how responsive the demand for bagels is to a change in her cream cheese prices. To accomplish this task, the following data would not be needed:
a. percentage change in bagel prices
b. original price of cream cheese
c. new quantity of bagels sold
d. original quantity of bagels sold
e. new price of cream cheese
A
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In order to lower the federal funds rate, the Fed ________ government securities in open market operations, so that banks' reserves ________ and the quantity of money ________
A) buys; increase; increases B) sells; increase; decreases C) buys; decrease; increases D) buys; decrease; decreases E) sells; decrease; decreases
Congress created the Federal Reserve System
A) to serve as a lender of last resort. B) to process the receipt of taxes received by the Internal Revenue Service. C) to regulate the value of the U.S. dollar against foreign currencies. D) to provide a source of mortgage loans to the residential housing market.
Those who think that a popular investment is necessarily a good investment often find themselves earning low returns
Indicate whether the statement is true or false
If the IS curve is relatively steep, then
A) there can be no long-run tradeoff between inflation and unemployment. B) monetary policy cannot be very effective in changing GDP. C) rational expectations theory is probably correct. D) Ricardian equivalence most likely holds. E) budget deficits will not affect future capital accumulation.