When the Fed buys $100 million of securities from a commercial bank, the
A) monetary base increases.
B) money supply decreases.
C) bank's reserves decrease.
D) required reserve ratio decreases.
E) bank is risking its depositors' money.
A
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Figure 10-5
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Figure 10-5 shows supply and demand conditions in a perfectly competitive industry and for a firm in that industry. At point C, the firm would
A. earn zero economic profit. B. earn negative economic profit. C. have a zero opportunity cost of capital. D. have a negative opportunity cost of capital.
If the Japanese price level falls relative to the price level in the United States, then:
a. Japanese buy less U.S. exports. b. the demand for dollars decreases. c. the supply of dollars increases. d. the value of the dollar falls. e. all of these are true.
Relative performance evaluation reduces the labor cost borne by the firm by:
A. using the employee's output for setting the compensation. B. focusing on the near term while setting incentive pay. C. ratcheting up each year's performance targets. D. filtering out common shocks from employee incentive pay.
The Ricardo-Barro effect says that a government budget deficit leads to
A) no change in the real interest rate. B) a lower real interest rate. C) an increase in the quantity of investment. D) a higher real interest rate. E) an increase in demand for loanable funds.