If the money multiplier is 10, the purchase of $1 billion of securities by the Fed on the open market causes a
A) $10 billion decrease in the money supply.
B) $1 billion decrease in the money supply.
C) $1 billion increase in the money supply.
D) $10 billion increase in the money supply.
D
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If the demand and supply curves for a commodity shift to the right and the shift in demand is greater than the shift in supply, then in comparison to the initial equilibrium, the new equilibrium will be characterized by:
A) a lower price and quantity. B) a higher price and quantity. C) the same price and quantity. D) a higher price and a lower quantity.
Refer to Figure 4-10. Suppose the market is initially in equilibrium at price P1 and now the government imposes a tax on every unit sold. Which of the following statements best describes the impact of the tax? For demand curve D1
A) the producer bears the entire burden of the tax if the supply curve is S2 and the consumer bears the entire burden of the tax if the supply curve is S1. B) the producer bears a smaller share of the tax burden if the supply curve is S2. C) the producer's share of the tax burden is the same whether the supply curve is S1 or S2. D) the producer bears a smaller share of the tax burden if the supply curve is S1.
If the required reserve ratio is 0.2, the demand deposit multiplier is
a. 0.2 b. 0.8 c. 1.25 d. 5.0 e. 8.0
The principle of “comparable worth” asserts that people with comparable, if not identical, skills and responsibilities should receive the same pay. If this principle were to become law, it would tend to
A. reduce the problem of the “cost disease of services.” B. exacerbate the problem of the “cost disease” of the service sector. C. be irrelevant to the “cost disease” problem. D. eliminate the problem of externalities.