If the Fed raises the discount rate, what happens to reserves and the money supply?
a. Reserves increase and the money supply decreases.
b. Both increase.
c. Reserves decrease and the money supply increases.
d. Both decrease.
D
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A major shortcoming of a barter economy is
A) the requirement of specialization and exchange. B) that money loses value over time from inflation. C) the requirement of a double coincidence of wants. D) that most goods and services cannot be traded.
Explain the reasoning behind the shutdown rules. When is it appropriate to operate with a loss?
What will be an ideal response?
During a major war between two oil producing nations, there would likely be
a. an increase in the price of oil because the supply of oil would decrease. b. an increase in the price of oil because the supply of oil would increase. c. a decrease in the price of oil because the supply of oil would decrease. d. a decrease in the price of oil because the supply of oil would increase.
High monopoly profits are possible if each of the oligopolists in a market: a. cooperates by reducing its output
b. cooperates by reducing its price. c. pursues self-interest by increasing its output. d. pursues self-interest by decreasing its output.