In Figure 35.1, if rents are controlled, then number of apartments that used to be rented that are now no longer rented is 
Figure 35.1
A. 0.
B. Q"-Q'.
C. Q"-Q*.
D. Q*-Q'.
Answer: D
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Banks with excess reserves will supply more reserves to the federal funds market as the interest rate increases
Indicate whether the statement is true or false
Activists believe that
a. the M1 money supply should be increased at a steady rate annually. b. taxes should be increased during a recession in order to balance the federal budget. c. the economy's self-correcting mechanism, if not stifled by perverse policies, will prevent prolonged periods of high unemployment. d. discretionary changes in macroeconomic policy can help smooth the business cycle of a market economy.
Assume you pay a premium of $0.70/bu for a call option with a strike price of $6.00/bu and that the current futures price is $6.50/bu. Then, the option is:
A. In-the-money B. At-the-money C. Out-of-the-money D. Worthless
A government budget deficit occurs when government expenditures are:
a. Less than government revenues b. Greater than government revenues c. Increasing and government revenues are increasing d. Decreasing and government revenues are decreasing