If both the demand for a product and the supply of it decrease, then the equilibrium quantity will ________ and the equilibrium price will ________.
A) increase; either increase, decrease, or remain constant
B) decrease; either increase, decrease, or remain constant
C) increase; increase
D) increase; decrease
Ans: B) decrease; either increase, decrease, or remain constant
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Real money demand in the economy is given by
L = 0.3Y - 600i, where Y is real income and i is the nominal interest rate. In equilibrium, real money demand L equals real money supply M/P. Suppose that Y equals 2000 and the real interest rate is 5%. (a) At what rate of inflation is seignorage maximized? (b) What is the maximum amount of seignorage revenue?
Unions tend to want import restrictions because
A) imports are usually of inferior quality. B) they can increase the wages for union workers by increasing the productivity of union workers when the workers aren't worried about foreign competition. C) the restrictions also reduce the number of immigrants that can enter the country and decrease the supply of nonunion labor. D) the restrictions decrease the demand for non-union made goods, increasing the demand for union made goods.
Which of the following actions by the Fed would increase the money supply?
a. Increasing the required reserve ratio. b. Selling government bonds in the open market. c. Increasing the discount rate. d. Reducing the required reserve ratio.
Which of the following best describes a cartel?
a. A group of cooperating oligopolists that jointly reduce output and raise price in imitation of a monopolist. When entry is very costly, these high prices can persist. b. A group of monopolistically competitive firms that jointly reduce output and raise price in imitation of a monopolist. When entry is very costly, these high prices can persist. c. A monopolist that reduces output and raises price. When entry is very costly, these high prices can persist. d. A group of identical non-cooperative oligopolists that is able to reproduce a monopoly equilibrium through price rivalry.