If the required reserve ratio is 0.05 and the Fed sells a $2,000 bond directly to an individual who pays for it with a check, what will happen to the money supply?
a. The money supply will increase by $2,000.
b. The money supply will decrease by $2,000.
c. The money supply will increase by $100.
d. The money supply will decrease by $100.
e. The money supply will decrease by $200.
B
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What are the tools available to governments to mitigate cycles of boom and bust? Why do these tools fail?
What will be an ideal response?
Normal profit
A) is when economic profits are zero. B) is the profit that competition will allow. C) is the opportunity cost of capital. D) all of these choices.
How do the high implicit marginal tax rates that often occur when transfer payments are inversely linked to earnings affect the incentive of poor people to work and earn?
a. A poor person's incentive to earn is increased. b. A poor person's incentive to earn is reduced. c. The incentive of the poor to earn is unaffected. d. The incentive of the poor to earn reported income is increased, but the incentive to earn unreported income is reduced.
Which of the following is not an example of a barrier to entry?
a. A soybean farmer is the first in her county to use a new brand of fertilizer. b. Microsoft obtains a copyright for its Windows operating system. c. A pharmaceutical company obtains a patent for a new medication to treat migraine headaches. d. A taxi cab driver in New York City obtains a license to legally provide transportation in New York City.