If the Fed purchases securities worth $10 million from a commercial bank, the banking system's balance sheet will show
A) an increase in securities held of $10 million and an increase in bank reserves of $10 million.
B) an increase in securities held of $10 million and a decrease in bank reserves of $10 million.
C) a decrease in securities held of $10 million and an increase in bank reserves of $10 million.
D) a decrease in securities held of $10 million and a decrease in bank reserves of $10 million.
C
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Felix deposited $500 into an account two years ago. The first year he earned 3 percent interest and the second year he earned 5 percent interest. How much money does Felix have in his account now?
a. $540.75 b. $540.80 c. $540.85 d. None of the above are correct to the nearest cent.
Figure 5-2
In Figure 5-2, consumer surplus is measured by the area
a.
ABC.
b.
OBCD.
c.
OACD.
d.
DCE.
Say a consumer is choosing between red wine and white wine. The price of red wine is 20 and the price of white wine is 10. If the marginal rate of substitution is 1, and if red wine is on the horizontal axis then the consumer is purchasing:
A. More than what her income would allow B. Too much white wine C. Just the right amount of both goods D. Too much red wine
In which of the following situations for an open mixed economy will the level of GDP contract?
A. When C a + S + M exceeds I g + X + T B. When I g + X + T exceeds C a + S + M C. When S a + M + T exceeds I g + X + G D. When I g + X + G exceeds S a + M + T