In equilibrium, if $1 = 0.5 pound sterling and 1 pound sterling = 40 Swiss francs, the exchange rate between dollars and francs will be ________.
A. 1 franc = $0.10
B. $1 = 80 francs
C. 1 franc = $0.20
D. $1 = 20 francs
Answer: D
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Under a k-percent rule, if the economy goes into expansion, the Fed would
A) increase the quantity of money. B) raise the federal funds rate. C) lower tax rates to keep revenue constant. D) lower the federal funds rate. E) None of the above answers is correct.
It has been suggested that if NHL hockey teams would lower ticket prices, they could increase revenue from ticket sales. Which of the following assumptions forms the basis for this suggestion?
a. Both d and e are correct. b. All of the following are correct. c. Demand for NHL hockey is income inelastic. d. Demand for NHL hockey is price elastic. e. There are many substitutes for NHL hockey.
Which of the following statements regarding labor supply is false?
a. Jerry's labor supply curve can bend backward if the income effect of a higher wage rate outweighs the substitution effect. b. Bob's labor supply curve will not bend backward if the wage rate is never so high that the income effect outweighs the substitution effect. c. If there is a wage rate above which the income effect is at least as great as the substitution effect, the labor supply curve will be vertical or bend backward. d. The labor supply curve will slope upward if the income effect dominates the substitution effect. e. Hayden's offer to work more hours as the result of a wage increase suggests that the substitution effect dominates the income effect.
A bank has $500,000 in deposits and $475,000 in loans. It has loaned out all it can. It has a reserve ratio of
a. 2.5 percent. b. 5 percent. c. 9.5 percent. d. 25 percent.