Which of the following is not a function performed by the Federal Reserve?
a) To clear checks.
b) To maintain the money supply.
c) To establish more effective supervision of the banking system in the United States.
d) To keep interest rates low.
Ans: d) To keep interest rates low.
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A production possibilities curve is plotted for a nation producing cotton and jute. Which of the following will cause a parallel rightward shift of the production possibilities curve?
A) An invention of a new fertilizer that increases cotton production by ten percent, without any effect on jute production B) An invention of a new fertilizer that increases jute production by five percent, without any effect on cotton production C) An invention of a new fertilizer that increases production of both cotton and jute by ten percent D) A two-times increase in the price of all cotton products and a three-times increase in the price of all jute products
Alejandro expects the price level to rise from 105 this year to 108 next year. If the price level rises to 110 next year instead of 108, which of the following will occur?
A) Alejandro's real wage rises. B) Alejandro's real wage remains unchanged. C) Alejandro's real wage may rise or fall, depending on the unemployment rate. D) Alejandro's real wage falls.
If a decrease in the price of good A causes a decrease in demand for good B, the two goods are
A) substitutes. B) complements. C) normal. D) inferior.
Marginal cost a. Is the incremental cost incurred by producing an additional unit of output. b. Is the total cost of production
c. Is the total fixed cost of production. d. None of the above