When the Federal Reserve increases the federal funds rate, bank loans ________, the supply of loanable funds ________, and the real interest rate ________
A) increase; increases; falls
B) decrease; decreases; rises
C) increase; increases; rises
D) do not change; decreases; rises
E) decrease; does not change; rises
B
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
If the price of land is zero,
a. the supply of land is a horizontal line b. rent is zero and land is a free good c. the MRP curve is positively sloped d. land rents are positive e. demand for land is relatively high
A country with a lot of land relative to its population may have a comparative advantage in:
A. capital-intensive activities. B. labor-intensive activities. C. technology-intensive activities. D. land-intensive activities.
For a monopsonist the marginal cost of increasing its workforce will always be greater than the wage rate because
A) there is not good factor substitution in a monopsony. B) the wage rate offered the newest employee must be paid to all workers. C) the industry will be a closed shop. D) a normal rate of return must be paid to the owner.