"When the Fed buys securities from a bank, the quantity of money eventually decreases by a fraction of the initial change in the monetary base." Is the previous statement correct or incorrect? Explain your answer
What will be an ideal response?
The statement is wrong on two counts. First, if the Fed buys securities from a bank, the quantity of money increases rather than decreases. Second, the money multiplier points out that the change in the quantity of money is ultimately greater than, not less than, the initial change in the monetary base.
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If the budget deficit was eliminated, the federal government would have more money than it could spend
a. True b. False Indicate whether the statement is true or false
Wages of doctors tend to be higher than wages of bankers. Which of the following is a compensating differential explaining the difference in wages?
a. Doctors have the stress of being responsible for other peoples' lives while bankers do not. b. Doctors are on call to work nights and weekends, while bankers work traditional business hours. c. Doctors must pay for malpractice insurance in case they are sued for a mistake on the job. d. All of the above are compensating differentials.
The price level in the economy is a composite measure reflecting the:
a. rate of change in average prices for the wide range of services produced and consumed in one of the sectors of the economy relative to the price level expected the next year. b. average price of the wide range of goods and services produced and consumed in the economy relative to the price level in a base year. c. rate of change in the price of inputs used to produce the wide range of goods and services in the overall economy relative to the price level in a base year. d. government's cost of procuring resources to produce public goods and services relative to the price level in a base year.
Average per capita water consumption in the United States was approximately how many gallons per day in 2005?
A. 440. B. 764. C. 1,941. D. 1,363.