The Board of Governors of the Federal Reserve System can increase commercial bank reserves by:
a. Increasing the reserve ratio
b. Decreasing the prime interest rate
c. Increasing the discount rate
d. Buying government securities in the open market
d. Buying government securities in the open market
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The total volume of business sales in our economy is several times larger than GDP because ________.
A. GDP does not take taxes into account B. GDP grossly understates the value of our annual output C. GDP excludes intermediate transactions D. Total sales are in money terms and GDP is always stated in real terms
An estimate of a household's long-run average income is called permanent income
Indicate whether the statement is true or false
Which of the following is not true concerning producer surplus? a. It is qraphically the area under the supply curve and above the market price. b. It exists in equilibrium
c. A leftward shift of the supply curve will decrease producer surplus. d. A rightward shift of the supply curve will increase producer surplus.
What does making decisions "at the margin" mean?
a. that people evaluate how easily a decision can be reversed if problems arise b. that people make those decisions that do not impose a marginal cost c. that people compare the marginal costs and marginal benefits of each decision d. that people always calculate the marginal dollar costs for each decision