When the U.S. Treasury sells gold, the immediate effect is that __________ and __________
A) reserves increase; currency in circulation decreases
B) reserves decrease; currency in circulation increases
C) reserves increase; Treasury deposits decrease
D) reserves decrease; Treasury deposits increase
D
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Which of the following can create a deadweight loss?
i. price supports ii. price floor iii. price ceiling A) i only B) i and iii C) ii and iii D) i, ii and iii E) i and ii
A reserve requirement of 25 percent would mean that each dollar of reserves could support ____ of demand deposits
a. $0.25 b. $0.75 c. $1.33 d. $4.00
A firm's choice about how much physical capital to employ differs from its choice of how much labor to employ because
a. the firm has to pay for its capital b. the productivity of labor depends on the firm's production function c. firm must compare the marginal costs and benefits of acquiring more capital d. firms do not own the labor they employ, but they frequently purchase capital outright e. labor is productive but capital is not
Consumption is most likely to respond one-for-one with changes in current income when
A) the change in current income results from a one-time bonus. B) people believe the change in their current income is temporary. C) people are able to borrow as much as they wish, as long as they pay it back. D) the change in current income is caused by the business cycle. E) none of the above