For normal goods, the income and substitution effects help explain the downward slope of the demand curve.
Answer the following statement true (T) or false (F)
True
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The figure above shows the market for bank reserves in Futureland. If the Bank of Futureland undertakes an open market purchase of government securities that changes the quantity of reserves by $25 billion, then the federal funds rate will
A) fall to 4 percent a year. B) remain at 6 percent a year. C) rise to 8 percent a year. D) change, but more information is needed to determine by how much. E) None of the above answers is correct.
If Bertrand price competitors incur recurring fixed costs, it will still be a Nash equilibrium for price to equal marginal cost.
Answer the following statement true (T) or false (F)
In the figure above, what is the marginal social benefit of the 3,000,000th CD per month?
A) $11.00 per CD B) $8.00 per CD C) $6.00 per CD D) None of the above answers is correct.
Use the above table. The MPS is
A. 0.20. B. 0.80. C. 0.09. D. 0.91.