Assume the required reserve ratio is 20 percent and the FOMC orders an open-market purchase of $100 million in government securities from member banks. If the oversimplified money multiplier is assumed, then the money supply will
A. increase by $500 million.
B. increase by $100 million.
C. decrease by $100 million.
D. decrease by $500 million.
Answer: A
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The decisions of firms and households are guided by prices and self-interest in a
a. command economy. b. centrally-planned economy. c. market economy. d. All of the above are correct.
Which of the following pairs is most likely to represent complementary goods?
A. Hotels and campgrounds. B. Butter and margarine. C. Bacon and eggs. D. Miniature golf and bowling.
In the Internet search market:
A. Yahoo, Bing, and Google have roughly equal market shares. B. the Herfindahl index value is 10,000. C. Google holds about 70 percent of the market, while Bing and Yahoo together comprise about 28 percent. D. government subsidies ensure that search engines are provided at no cost to all Internet users.
Establishing a state employment agency that speeds up the process of matching unemployed workers with unfilled jobs is an attempt to lower
A) frictional unemployment. B) structural unemployment. C) cyclical unemployment. D) seasonal unemployment.