The Fed sells a U.S. government security and a bank dealer writes a check for the amount. When the check clears
A) reserves remain unchanged because the decrease of reserves at the dealer's bank is offset by an increase in the reserves at the Fed.
B) reserves have fallen by the amount of the reserves times the reserve ratio, and the money supply falls by the difference between the amount of the check and the fall in the reserves.
C) reserves have fallen by the amount of the check because the Fed clears the check by reducing the bank's deposits at the Fed.
D) reserves increase by the amount of the check because the Fed clears the check by increasing the amount of the bank's deposits with the Fed.
C
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Refer to Figure 13-1. Ceteris paribus, a decrease in interest rates would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.
Monopolists can achieve any level of profit they desire because they have unlimited market power
a. True b. False Indicate whether the statement is true or false
Consider the market for university economics professors. Suppose the opportunity cost of going to graduate school to get a Ph.D. in economics increases for many individuals. Suppose it generally takes about five years to get a Ph.D. in economics. Holding all else constant, in five years the equilibrium wage for university economics professors will
a. increase. b. decrease. c. not change. d. It is not possible to determine what will happen to the equilibrium wage.
The newest school of economic thought to emerge are _________.
A. the economic behaviorists B. supply side economists C. the new classical economists D. monetarists