Assume goods X and Y are complements and are produced in perfectly competitive markets. All else constant, an increase in demand for good X would cause: A) a decrease in the number of firms that produce good X. B) an increase in the number of firms that produce good Y. C) a decrease in the […]
Date: September 10th, 2020
Refer to Scenario 2. What percentage of the variation in the dependent variable, Market Value, is explained by the regression model? What will be an ideal response? ANSWER The coefficient of determination is .555762 or 55.5762 percent of the variation in Market Value is explained by the regression model.
Date: September 10th, 2020
A goal of expansionary monetary policy is to: A) decrease the rate of growth of real GDP. B) increase the rate of growth of real GDP. C) increase inflation. D) none of the above. ANSWER B
Date: September 10th, 2020
Automobile manufacturers often use incentive programs, including special financing rates and cash rebates, to increase sales. However, a customer is usually restricted to choosing either the low financing rate or the rebate, but not both. Is this an example of price discrimination? If so, what type? Explain your reasoning. ANSWER Yes, this is a […]
Date: September 10th, 2020
Which of the following statements is TRUE? A) State and local governments cannot default on their bonds. B) Bonds issued by state and local governments are called municipal bonds. C) All government issued bonds—local, state, and federal—are federal income tax exempt. D) The coupon payment on municipal bonds is usually higher than the coupon payment […]
Date: September 10th, 2020
As the payments system evolves from barter to a monetary system, A) commodity money is likely to precede the use of paper currency. B) transaction costs increase. C) the number of prices that need to be calculated increase rather dramatically. D) specialization decreases. ANSWER A
Date: September 10th, 2020
From 1980-1985, the dollar strengthened in value against other currencies. Who was helped and who was hurt by this strong dollar? What will be an ideal response? ANSWER American consumers benefitted because imports were cheaper and consumers could purchase more. American businesses and workers in those businesses were hurt as domestic and foreign sales […]
Date: September 10th, 2020
The growth of the subprime mortgage market led to A) increased demand for houses and helped fuel the boom in housing prices. B) a decline in the housing industry because of higher default risk. C) a decrease in home ownership as investors chose other assets over housing. D) decreased demand for houses as the less […]
Date: September 10th, 2020
The amount of checkable deposits that banks are required by regulation to hold are the A) excess reserves. B) required reserves. C) vault cash. D) total reserves. ANSWER B
Date: September 10th, 2020
Contractionary monetary policy is achieved by: A) decreasing the amount of bank reserves and lowering the federal funds rate. B) decreasing the amount of bank reserves and raising the federal funds rate. C) increasing the amount of bank reserves and lowering the federal funds rate. D) increasing the amount of bank reserves and raising the […]
Date: September 10th, 2020
