If a bank customer deposits $100 in cash, and the bank lends $90 of that deposit to another customer by crediting $90 to her account:
A. the money supply has increased by $190.
B. the money supply has increased by $90.
C. the money supply has decreased by $10.
D. the money supply has not changed.
Ans: B. the money supply has increased by $90.
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An increase in demand for oil, along with a simultaneous increase in supply of oil, will
A. increase price, but whether it increases quantity depends on how much each curve shifts. B. increase quantity, but whether it increases price depends on how much each curve shifts. C. increase price and decrease quantity. D. decrease price and increase quantity.
The most commonly used measure of changes in the cost of living for households
a. real GDP. b. the CPI. c. nominal GDP. d. the GDP deflator.
A change in supply cannot be caused by a change in:
a. resource prices. b. technology. c. prices of other goods. d. the price of the good itself. e. the number of suppliers.
Which statement is true regarding average variable cost?
a. Average variable cost is the additional cost of producing one more unit of output. b. The average variable cost curve will always lie below the curve for average total cost. c. Average variable cost is obtained when variable cost is multiplied by quantity of output. d. As output grows, average variable cost moves farther away from average cost.