Refer to Figure 14.2. A movement from point d to point a could be caused by a simultaneous ________ and ________.
A. decrease in the money supply; increase in the price of oil
B. increase in the money supply; massive crop failure
C. decrease in taxes; decrease in the money supply
D. decrease in government spending; decrease in the price of oil
Answer: A
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The purchase and sale of government bonds by the Fed for the purpose of altering bank reserves is referred to as:
A. Open-market operations. B. Closed-market operations. C. Discounting. D. Expansionary fiscal policy.
As the volume of waste decreases (holding the amount of paper produced constant), the production cost per ton of paper increases at a decreasing rate because the firm must use increasingly sophisticated abatement equipment to decrease the volume of waste.
Answer the following statement true (T) or false (F)
Which of the following will NOT be true if the antitrust laws are successful?
A. Firms will not restrict output. B. Firms will produce the competitive output. C. Firms will produce the quantity at which marginal cost equals marginal revenue and charge a price that is greater than marginal cost. D. Producers will earn zero economic profits in the long-run.
Currency held within banks is part of:
A. both the M1 and M2 definitions of the money supply. B. the M2 definition of the money supply only. C. the M1 definition of the money supply only. D. none of these definitions of the money supply.