The purchase of Treasury securities by the Federal Reserve will, in general,
A) increase the quantity of reserves held by banks.
B) decrease the quantity of reserves held by banks.
C) not change the money supply.
D) not change the quantity of reserves held by banks.
A
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Under the Classical assumptions, an increase in government spending causes
A) income to rise. B) income to fall. C) interest rates to rise. D) interest rates to fall.
Tele-Com, Inc, the nation's largest cable TV company, tested the effect of a price reduction for the Disney Channel. It lowered prices from $10.75 to $7.95 and found that the number of customers more than doubled. This means the
a. demand curve for the Disney Channel shifted to the right. b. supply curve of the Disney Channel shifted to the left. c. demand for the Disney Channel is elastic in this price range. d. demand for the Disney Channel is inelastic in this price range.
Specialization—the division of labor—enhances productivity and efficiency by:
A. allowing workers to take advantage of existing differences in their abilities and skills. B. avoiding the time loss involved in shifting from one production task to another. C. allowing workers to develop skills by working on one, or a limited number, of tasks. D. all of the means identified in the other answers.
The value of total output decreases when labor leaves one industry and goes to another and capital leaves the second industry and goes to the first. This indicates that
A. the first situation was not efficient. B. it would be efficient to return to the first situation. C. the second situation is efficient. D. price is greater than marginal cost.