Which of the following is not a determinant of supply?
What will be an ideal response?
consumer tastes
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If the Fed buys government securities, then
A) the quantity of money is not changed, just its composition. B) new bank reserves are created. C) the quantity of money decreases. D) bank reserves are destroyed. E) banks' excess reserves decrease.
A consumer is a lender if
A) optimum current consumption is less than current disposable income. B) optimum current consumption is greater than current disposable income. C) current disposable income is greater than future disposable income. D) the consumer's indifference curves are relatively flat.
Some firms in monopolistically competitive markets differentiate their products by their physical characteristics.
Answer the following statement true (T) or false (F)
In Figure 15.3, the Fed can change the equilibrium interest rate from 2 percent to 6 percent by
A. Reducing the discount rate. B. Selling bonds in the open market. C. Decreasing the reserve requirement. D. Buying bonds in the open market.