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One alternative way to calculate the total change in money supply when the Fed injects money into the economy or takes away money from the economy is the amount of money injected or taken away by the Fed times the money multiplier. In a simplified banking system in which all banks are subject to a 20% required reserve ratio, a sale of $10,000 government securities by the Fed would cause the money supply to
A. decrease by $50,000.
B. increase by $50,000.
C. decrease by $100,000.
D. increase by $100,000. E. none of the above.
A seafood restaurant in a beach resort town has a fixed (unavoidable) cost of $1,000 per month and variable (avoidable) costs of another $1,000 per month. Its total revenues over t
Q. Describe classical model of macroeconomics? Though we use the term ‘the classical model' as if there were just one classical model, this isn't quite true. For all the models
Firms such a Moody's and Standard & Poor's study corporations that issue bonds. They publish "ratings" for the bonds- evaluation of the likelihood of default. Suppose these rating
Instructions For the following 10 questions, consider an economy which is initially in equilibrium without a tax, with P* of $90 and Q* of 10. Later, a tax is put on the market
Note that it's changes in prices during 2008 that matter for the high real interest rate (time period when your deposit is earning interest). This means that you can never know how
Q. Production function and Growth? From the simple production function Y = f(L, K), we can classify three sources of growth: An increase in L. An increase in K.
describe how open market policy can be used to stimulate economic activity in the country
List the 3 factors that determine the price elasticity of demand? State the factor that determines the price elasticity of supply?
the uses of production function
A perfectly competitive painted necktie industry has a large number of potential entrants. Each firm has an identical cost structure such that long-run average cost is minimized at
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