Questions from General Economics

Q: According to the theory of efficiency wages, a. firms

According to the theory of efficiency wages, a. firms may find it profitable to pay above equilibrium wages. b. an excess supply of labor puts downward pressure on wages. c. sectoral shifts are the ma...

Q: Two ice-cream stands are deciding where to set up along

Two ice-cream stands are deciding where to set up along a 1-mile beach. The people are uniformly located along the beach, and each person sitting on the beach buys exactly 1 ice-cream cone per day fro...

Q: What distinguishes money from other assets in the economy?

What distinguishes money from other assets in the economy?

Q: With the economy in a recession because of inadequate aggregate demand,

With the economy in a recession because of inadequate aggregate demand, the government increases its purchases by $1,200. Suppose the central bank adjusts the money supply to hold the interest rate co...

Q: What are demand deposits and why should they be included in the

What are demand deposits and why should they be included in the stock of money?

Q: If the Fed wants to increase the money supply with open-

If the Fed wants to increase the money supply with open-market operations, what does it do?

Q: What is the discount rate? What happens to the money supply

What is the discount rate? What happens to the money supply when the Fed raises the discount rate?

Q: What are reserve requirements? What happens to the money supply when

What are reserve requirements? What happens to the money supply when the Fed raises reserve requirements?

Q: The money supply includes all of the following EXCEPT a.

The money supply includes all of the following EXCEPT a. metal coins. b. paper currency. c. lines of credit accessible with credit cards. d. bank balances accessible with debit cards.

Q: Chloe takes $100 of currency from her wallet and deposits it

Chloe takes $100 of currency from her wallet and deposits it into her checking account. If the bank adds the entire $100 to reserves, the money supply _________, but if the bank lends out some of the...