Open-market operations are:
A. sales or purchases of government securities, by the Fed, to or from banks on the open market.
B. regulations that set the minimum fraction of deposits banks must hold in reserve.
C. operations that allow any bank to borrow reserves from the Fed at a special interest rate, called the discount rate.
D. the purchase and sale of financial instruments on the open market.
A. sales or purchases of government securities, by the Fed, to or from banks on the open market.
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The figure above shows Diane's demand curve for soda. The price of a soda is $1.00. Diane's consumer surplus from her 10th soda is
A) $0.00. B) $0.50. C) $1.00. D) $1.50. E) $2.50.
"If the marginal product of labor curve slopes downward, then the average product of labor curve necessarily must slope downward." Explain whether the previous statement is correct or incorrect?
What will be an ideal response?
Producers are willing and able to offer greater quantities for sale at higher prices because
a. they have the incentive to pay the increasing opportunity cost of resources to attract them from alternative uses b. they will decrease their profits by expanding production at higher prices c. the government orders them to do so d. lower prices attract new firms, which have higher costs of production e. they hire superior quality, higher-priced resources as production expands
Figure 11-2
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Which graph in Figure 11-2 best reflects a Keynesian’s view of the impact of raising taxes on saving?
A. 1 B. 2 C. 3 D. 4