If at the prevailing interest rate the quantity of money demanded is $2 trillion, and the supply of money is $1.5 trillion, then which of the following is true?
A. There is a shortage of money, and consequently interest rates must fall in order to achieve an equilibrium in the money market.
B. There is a surplus of money, and consequently interest rates must fall in order to achieve an equilibrium in the money market.
C. There is shortage of money, and consequently interest rates must rise in order to achieve an equilibrium in the money market.
D. There is a surplus of money, and consequently interest rates must rise in order to achieve an equilibrium in the money market.
Answer: C
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When the dollar appreciates relative to foreign currencies, it means that ________.
A. foreigners need less of their currency to buy one dollar B. we can buy less foreign currency with a given amount of dollars C. we need more dollars to buy each unit of another currency D. the value of foreign currencies decreased relative to our dollar
In the United States, the productive factor that, as a group, receives the largest fraction of the nation's total income is
A) labor. B) consumption goods and services. C) land. D) entrepreneurshi
An economic system is said to be a
a. market economy if there is substantial central planning. b. traditional economy if it relies on extensive market trading. c. market economy if it relies on self-interested behavior and incentives. d. command economy if it relies on long-standing practices.
All of the following were reasons that the Fed increase the required reserve ration in 1936 EXCEPT:
A) concerns over the possibility of future inflation B) to eliminate the high level of excess reserves C) fears that the economy was overheating D) concerns over a speculative bubble