When Federal Reserve Banks add to their holdings of government securities,
A) commercial banks must reduce their net lending.
B) commercial bank reserves increase.
C) the Fed is extending less credit to the economy.
D) the stock of money declines.
B
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Refer to Figure 14-4. In a real world situation involving Rainbow Writer and Odeon, what scenario below might permit Rainbow Writer to rationally refuse an offer from Odeon of $40 per copy of the software package?
A) Odeon is considering new distribution outlets for its products. B) Odeon hires a software developer to begin developing its own proprietary engraving software. C) Odeon is also negotiating with FastWrite, Rainbow Writer's chief rival. D) Odeon's competitors are also interested in bundling Rainbow Writer's software.
The supply curve of loanable funds slopes up because
A) at higher bond prices more loanable funds will be supplied. B) higher interest rates reduce the inflation rate. C) an increase in the interest rate makes lenders more willing and able to supply more funds. D) a decrease in the interest rate makes lenders more willing and able to supply more funds.
A price ceiling is
a. the lowest price that the law will allow to be charged in the market b. the highest price that the law will allow to be charged in the market c. the price that must be charged in the market d. imposed if the government believes the equilibrium price is too low e. applicable only in nonessential goods markets
When an emissions tax is imposed on production of a good, the price will be __________ than it would be in the absence of the tax, and the equilibrium quantity will be __________ :
a. higher, higher b. lower, lower c. lower, higher d. higher, lower