Which of the following policy actions by the Fed would cause the money supply to decrease?
a. An open-market purchase.
b. A decrease in required reserve ratios.
c. A decrease in the discount rate.
d. None of these.
d
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Assuming a constant cost industry, consumer surplus would be greater under monopoly than if the industry were perfectly competitive
a. True b. False
Suppose the Federal Reserve announces that it will be making a change to a key interest rate to increase the money supply. This is likely because
a. the Federal Reserve is worried about inflation. b. the Federal Reserve is worried about unemployment. c. the Federal Reserve is hoping to reduce the demand for goods and services. d. the Federal Reserve is worried that the economy is growing too quickly.
Trade dollarization refers to the phenomenon of:
a. the practice of insisting on trade in U.S. dollars. b. the fact that many international commodities are traded in U.S. dollars only. c. the fact that many dollars have flowed out of the U.S. and are used in other nations as their national currency. d. the falling dollar combined with a rising trade balance.
A monopoly arises when there:
a. is a firm desiring to compete in many markets. b. is a firm wanting to maximize profits. c. are barriers to the entry of other firms in the industry. d. is government intervention to establish and enforce a price ceiling.