A decrease in quantity supplied
a. results in a movement downward and to the left along a fixed supply curve.
b. results in a movement upward and to the right along a fixed supply curve.
c. shifts the supply curve to the left.
d. shifts the supply curve to the right.
a
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Answer the next question on the basis of the following consolidated balance sheet of the commercial banking system. Assume that the reserve requirement is 10%. All figures are in billions.Assets (billions of dollars)Liabilities & Net Worth (billions of dollars)Reserves$60Checkable deposits$600Securities140Stock shares260Loans260 Property400 Suppose the Fed wants to increase the money supply by $400 billion to drive down interest rates and stimulate the economy. Assuming that the money multiplier is operating to full effect, to accomplish the desired increase, the Fed could ________.
A. sell $40 billion of U.S. securities to the banks B. sell $20 billion of U.S. securities to the banks C. buy $20 billion of U.S. securities from the banks D. buy $40 billion of U.S. securities from the banks
The speculative demand for money may not exist because
A) banks now pay interest on some types of checkable deposits. B) there are alternative riskless assets paying higher returns than the return on money. C) the transactions demand can be shown to depend on interest rates. D) government regulations have eliminated risk in the financial markets.
If consumer income increases, then the demand for an inferior good shifts right
a. True b. False Indicate whether the statement is true or false
If the personal savings rate rose to 10%
A. our current account deficit would probably fall. B. our current account deficit would probably rise. C. our current account deficit would be unaffected.