Questions from General Economics

Q: Although the Commerce Department, the Wharton School, the Federal Reserve

Although the Commerce Department, the Wharton School, the Federal Reserve Board, and other organizations publish economic forecasts and data on key economic indicators, they are not without armchair c...

Q: Suppose, unfortunately, your mathematics and economics professors have decided to

Suppose, unfortunately, your mathematics and economics professors have decided to give tests two days from now and you can spend a total of only twelve hours studying for both exams. After some though...

Q: In what form does a bank hold its required reserves? Assume

In what form does a bank hold its required reserves? Assume the Fed has a 20 percent required reserve ratio. What amount of checkable deposits can be supported by $10 million in required reserves?

Q: Suppose you remove $1,000 from under your mattress and

Suppose you remove $1,000 from under your mattress and deposit it in First National Bank. Using a balance sheet, show the impact of your deposit on the bank’s assets and liabilities. If the required r...

Q: Suppose the Federal Reserve’s trading desk buys $500,000 in

Suppose the Federal Reserve’s trading desk buys $500,000 in T-bills from a securities dealer who then deposits the Fed’s check in Best National Bank. Use a balance sheet to show the impact on the bank...

Q: Based on the quantity theory of money, what would be the

Based on the quantity theory of money, what would be the impact of increasing the money supply by 25 percent?

Q: Why is the shape of the aggregate supply curve important to the

Why is the shape of the aggregate supply curve important to the Keynesian-monetarist controversy? (Hint: Review Exhibit 6 in the chapter on aggregate demand and supply.) Details from Exhibit 6:

Q: What are the basic motives for the transactions demand, precautionary demand

What are the basic motives for the transactions demand, precautionary demand, and speculative demand? Explain how these three demands are combined in a graph to show the total demand for money.

Q: Using the demand and supply schedule for money shown in Exhibit 10

Using the demand and supply schedule for money shown in Exhibit 10, do the following: a. Graph the demand for money and the supply of money curves. b. Determine the equilibrium interest rate. c. Suppo...

Q: “A monetarist investigator might say that the sewer flow of 6

“A monetarist investigator might say that the sewer flow of 6,000 gallons an hour consisted of an average of 200 gallons in the sewer at any one time with a complete turnover of the water 30 times eve...