The figure above shows the market for bank reserves in Futureland. If the Bank of Futureland undertakes an open market sale of government securities that changes the quantity of reserves by $25 billion, then the federal funds rate will
A) remain at 4 percent a year.
B) rise to 6 percent a year.
C) fall to 4 percent a year.
D) change, but more information is needed to determine by how much.
E) None of the above answers is correct.
B
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Suppose a country's labor supply increases in a year while its capital stock remains constant. Which of the following is likely to happen in this case if output is a function of capital and total efficiency units of labor?
A) Its total output will increase. B) Its total output will decrease. C) Its output per capita will decrease. D) Its total output will remain constant.
If leisure is a normal good for a worker, and the income effect of a wage change dominates the substitution effect, then if wages increase:
a. there will be a decrease in the quantity of labor supplied by the worker. b. there will be an increase in the quantity of labor supplied by the worker. c. there will be no change in the quantity of labor supplied by the worker. d. the worker's individual supply curve will shift to the left.
During the holiday season, high-end retailers frequently place a high price on merchandise on weekends and discount the price during the week. They do this because they believe that two groups of customers exist: shoppers with little free time and bargain hunters. Bargain hunters have time to shop around and frequently shop during the week. What do economists call this price strategy used by
high-end retailers? a. oligopoly b. price discrimination c. compensating differential d. in-kind transfers
Why do private companies rarely provide public goods?
A. The consumers pay for the public good from the company they want to buy it from. B. There is no way to force people to pay for the public good which increases free riders. C. The consumers do not actually want the public goods. D. The public goods are consumed which doesn't allow others to consume them also.