To fight a recession, an appropriate monetary policy would be that the Fed conducts an open market operation that ________ government securities, ________ the federal funds rate, and ________ aggregate demand
A) buys; lowers; decreases
B) sells; lowers; increases
C) sells; raises; decreases
D) buys; lowers; increases
E) sells; raises; increases
D
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Following a new deposit of $50 at a bank, drawn on funds previously held on deposit at another bank, when the reserve ratio is 10 percent, the maximum potential increase in the money supply will be
A) $0. B) $50. C) $400. D) $500.
The expected revenues in auctions with risk-averse bidders with independent private values will be:
A. English = Second price = First price = Dutch. B. English > Second price > or < First price = Dutch. C. English > Second price > First price = Dutch. D. First price = Dutch > English = Second price.
A major difference between a tariff and a quota is that a tariff a. will reduce the ability of foreigners to obtain the purchasing power to buy a nation's export goods, but a quota will not affect the demand of foreigners for the nation's exports. b. typically generates tax revenue while a quota does not
c. can easily be rescinded but a quota cannot. d. will reduce imports but a quota generally will not.
The New York Times reported in August 1997 that over one-third of all bottled water sold in the United States is simply filtered tap water. For example, the Everest brand of water comes from the municipal water supply of Corpus Christi, Texas. Explain
why consumers will pay more than $1 for a quart of water, when they could get basically the same quart directly from the tap for the smallest fraction of a penny.