Which of the following represents the chain of causation for expansionary policy?
A. An increase in real GDP increases investment, which increases the money supply, which reduces the interest rate.
B. An increase in the money supply reduces the interest rate, which increases investment, which increases real GDP.
C. An increase in investment increases the interest rate, which increases the money supply, which increases real GDP.
D. An increase in the money supply increases investment, which increases the interest rate, which increases real GDP.
Answer: B
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"I really enjoy watching movies. The first one is best. After that I still enjoy movies but the last one is not as much fun to watch as the one before it." This statement reflects the
A) principle of diminishing total utility. B) principle of diminishing marginal utility. C) principle of increasing marginal utility. D) law of supply.
In economics, which of the following is considered as financial capital?
a. Offices and warehouses b. Stocks and bonds c. Machinery d. Factories e. Equipment
Which of the following is a bank liability?
A. Reserve deposits at the Fed. B. Loans made to customers. C. Transactions account balances. D. Securities the bank has purchased.
The term "compensating differential" refers to
a. the fact that workers who do similar work should be paid the same wage. b. the fact that some workers live further from their jobs than do other workers. c. a wage difference that is due to unionization of some firms but not others. d. a wage difference that arises from nonmonetary characteristics of different jobs.