Refer to the information in the table. The amount of currency held by the public ________, and the amount of reserves held by banks ________. It must be the case that, in 1932, the Federal Reserve ________. Currency held by public (in billions)Reserve-deposit ratioBank reserves (in billions)Money supply (in billions)December 1931$4.590.095$3.11$37.3December 1932$4.820.109$3.18$34.0
A. increased; also increased; increased the discount rate
B. decreased; also decreased; kept the rate of inflation low
C. increased; also increased; injected reserves into the economy
D. decreased; increased; performed open-market operations
Answer: C
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The labor market is in equilibrium whenever
A) the nominal wage rate is decreasing. B) the nominal wage rate is increasing. C) the nominal wage rate is not changing. D) the real wage rate is increasing. E) the quantity of labor demanded equals the quantity of labor supplied.
If the demand for workers with doctorate degrees in economics increases, we would expect
a. the wages of economists to increase in the short run and the number of economists employed to increase in the long run. b. the supply of economists to increase in the short run and their wages to rise in the long run. c. a rapid increase in the supply of economists, causing wages to remain constant. d. the wages of economists to decrease in the short run and the number of economists employed to increase in the long run.
Will a home monopolist prefer a quota or a tariff to protect its output?
a. The home monopolist will prefer a tariff, because a tariff allows it to earn higher profits than a quota. b. The home monopolist will prefer a quota, because a quota may allow it to earn higher profits than a tariff. c. It is immaterial to the home monopolist because it will earn the same higher profits with each form of protection. d. The home monopolist will prefer neither, because it earns higher profits in a free-trade situation.
Rational behavior often involves ______.
a. anticipating the future b. reflecting on the past c. random acts d. a disregard of values