When banks use the money they receive from deposits to make loans, they:
A. decrease the money supply through open market operations.
B. increase the money supply through open market operations.
C. increase the money supply through the money multiplier.
D. decrease the money supply through the money multiplier.
Ans: C. increase the money supply through the money multiplier.
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Any change that shifts the supply curve outward to the right, and does not affect the demand durve will lower the equilibrium price and raise the equilibrium
a. True b. False Indicate whether the statement is true or false
Use the following graph to answer the next question.
The graph shows the cost curves for a perfectly competitive firm. If the market price of the product is $1.25 per unit,then the firm will earn how much in profits/losses in the short run?
A. $25 B. $9 C. -$9 D. -$12
If you dislike the smell of gardenias and you live next to a gardenia farm, the scent of gardenias that wafts over to you would be, in economic terms, a:
a. positive nuisance b. nullified benefit. c. pollutant. d. negative externality.
What happens when two countries apply tariffs against each other in an attempt to capture their terms-of-trade gain?
a. Both countries lose because the terms-of-trade gain for one country is canceled by the tariff in the other country. b. Both countries gain because the terms-of-trade gain for one country is canceled by the tariff in the other country. c. Neither country gains nor loses because the terms-of-trade gain for one country is canceled by the tariff in the other country. d. The country initially applying the tariff gains because it captures the terms-of-trade gain; the other country neither gains nor loses.