The Federal Reserve is powerful because it can influence _______ through its control over _______.
A. the money supply; aggregate demand
B. interest rates; aggregate supply
C. aggregate demand; the money supply
D. aggregate supply; interest rates
Ans: C. aggregate demand; the money supply
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If an individual borrows $100 at an annual rate of interest of 5%, how much interest will he have to pay at the end of a year?
A) $20 B) $10 C) $50 D) $5
Refer to the table above. If the market is perfectly competitive, what is Buyer 3's consumer surplus?
A) $0 B) -$1 C) $1 D) $2
A person is dynamically consistent if:
A. his preferences over the alternatives available at some future date change as the date approaches. B. his preferences over the alternatives available at some future date do not change as the date approaches. C. he is also statically consistent. D. None of these is correct.
For an inferior good, the income effect
a. is zero b. at least partially offsets the substitution effect c. operates to increase the quantity demanded d. helps explain why the demand curve slopes upward e. does not exist