Which of the following is a component of high powered money?
A) bonds held by banks, loans, and bank reserves
B) currency in circulation plus bank reserves
C) currency in circulation plus checkable deposits
D) bonds held by banks plus checkable deposits
E) the sum of currency in circulation, bank reserves, and checkable deposits
B
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In the absence of financial frictions, ________
A) interest rates for different borrowers move closely together B) all loans in the economy are transacted at a common interest rate C) the level of output is not affected by changes in the real interest rate D) an increase in inflation leads to a decrease in the real interest rate
The era of Prohibition began in 1920 when the Volstead Act was passed to implement the Eighteenth Amendment to the Constitution, which prohibited the production and sale of liquor and beer. In 1920 much of this activity went underground, and Al Capone became a leading illegal entrepreneur. Assuming the amount of liquor and beer produced stayed the same, what was the effect of the Volstead Act on
the GDP in 1920? a. GDP would have declined, since activities in the underground economy are not included. b. GDP would have remained the same, since only the organization producing the goods changed. c. GDP would have increased, because production in the underground economy increased. d. Real GDP would have increased, while nominal GDP would have decreased.
Total profit
A. is the rectangle bounded by EFIJ.
B. is the rectangle bounded by FGHI.
C. is the rectangle bounded by GHMO.
D. cannot be found on this graph.
A firm faces the following relationship between the real wage it pays and the effort exerted by its workers.
The marginal product of labor for this firm is given by MPN = E (100 - N)/9. How many workers will the firm employ?
A. 96 B. 92 C. 80 D. 88