Which of the following central bank policies will lower the money supply?
a. Buying government securities.
b. Lowering the discount rate.
c. Selling foreign currency in the foreign exchange market.
d. Lowering the reserve ratio.
e. None of the above.
.C
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An increase in net taxes (taxes paid by the private sector to the government less transfer payments and interest payments made by the government to the private sector) will:
A. increase private saving. B. increase public saving. C. decrease public saving. D. reduce investment in new capital equipment.
At a long-run equilibrium in monopolistic competition, price equals
A) average total cost. B) marginal cost but not marginal revenue. C) marginal revenue but not marginal cost. D) zero. E) marginal revenue and marginal cost.
A reason why it is difficult for developing countries to maintain a cartel is that
A) the elasticity of demand for a cartel's output decreases over time. B) producers in the cartel have an economic incentive to cheat. C) economic profits discourage other producers from entering the industry. D) producers in the cartel have the motivation to lower prices but not to raise prices. E) tariffs allow producers in the cartel to produce items that make no profit.
Because the supply and demand of housing are inelastic in the short run, the initial shortage caused by rent control is large
a. True b. False Indicate whether the statement is true or false