If parking spaces on a college campus are scarce, with quantity demanded during the “peak” hours, from 8 a.m. to 11 a.m., far greater than the number of spaces, an economist would propose as an efficient solution,
A. lowering the parking fees during those hours to compensate students for the longer search time.
B. charging the same parking fees during all hours of the school day.
C. raising parking fees during the peak hours to encourage some students to schedule classes during other hours when parking fees are lower.
D. hiring more security guards to patrol for illegal parkers.
Answer: C
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In economics, investment is defined as
A) disposable income plus consumption. B) disposable income minus consumption. C) the spending by businesses on capital goods and inventories. D) the spending by households on human capital and durable goods.
If the Fed has a goal of stable real GDP and government spending increased, which of the following would occur?
a. The money demand would not change, real GDP would not change, the interest rate would decrease, and there would be partial crowding out. b. Money demand would not change, real GDP would not change, the interest rate would increase, and there would be complete crowding out. c. Money demand would increase, real GDP would not change, the interest rate would increase, and there would be partial crowding out. d. Money demand would not change, real GDP would increase, the interest rate would decrease, and there would be complete crowding out. e. Money demand would increase, real GDP would not change, the interest rate would decrease, and there would be complete crowding out.
The U.S. Secretary of the Treasury met with the Japanese Finance Minister to discuss possible cuts in the Japanese discount rate. The likely outcome of currency speculation in response to this news is that
a. the dollar will depreciate. b. the dollar will appreciate. c. the yen will appreciate. d. both the dollar and yen will appreciate.
A decrease in the money supply might indicate that the Fed had
a. purchased bonds in an attempt to increase the federal funds rate. b. purchased bonds in an attempt to reduce the federal funds rate. c. sold bonds in an attempt to increase the federal funds rate. d. sold bonds in an attempt to reduce the federal funds rate.