As output rises, the profit effect results from
A. Constant costs that do not rise when prices rise.
B. Tight supplies of factors of production.
C. The law of demand.
D. Lower opportunity costs.
Answer: A
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How can the Federal Reserve actually increase the money supply?
A) by delaying transfer of money among banks B) by purchasing more government bonds in the open market C) by doubling the reserve requirement D) by raising the discount rate
The economy is at the equilibrium shown as point a in the above figure. To restore the economy to potential GDP, the Fed should
A) buy government securities and thereby increase aggregate supply. B) sell government securities and thereby decrease aggregate demand. C) buy government securities and thereby decrease aggregate demand. D) buy government securities and thereby increase aggregate demand. E) sell government securities and thereby increase aggregate demand.
Unlike the New York Stock Exchange, NASDAQ is an electronic stock market with trades executed through a sophisticated computer and telecommunications network.
Answer the following statement true (T) or false (F)
During the 2007-2009 financial crisis the currency ratio
A) increased sharply. B) decreased sharply. C) increased slightly. D) decreased slightly.