Refer to Scenario 17.2. The highest level of y* that can be set and still have the high-productivity people choose to meet it is
A) 90.
B) 60.
C) 30.
D) 22.5.
E) 15.
C
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Ceteris paribus, if the Fed raises the discount rate, then:
A. The money multiplier decreases. B. The lending capacity of the banking system increases. C. Excess reserves decrease. D. The incentive to borrow reserves decreases.
If the Federal Reserve is currently paying 1 percent interest on bank reserves, but then reduces that interest rate to 0.5 percent, banks may decide to hold ________ reserves, and the money supply may ________.
A. fewer; increase B. more; decrease C. more; increase D. fewer; decrease
If the marginal cost curve is rising, which of the following must be true?
A. Total costs must be rising. B. The average total cost curve must be above the marginal cost curve. C. The average total cost curve must be below the marginal cost curve. D. The average total cost curve must be rising.
An increase in Switzerland's interest rate and an increase in Switzerland's price level relative to U.S. price level have the same effect on the exchange rate between the two countries.
Answer the following statement true (T) or false (F)