Questions from General Economics

Q: Briefly describe the effect on the money supply of the following monetary

Briefly describe the effect on the money supply of the following monetary policies: a. The Fed purchases $20 million worth of U.S. Treasury bonds. b. The Fed increases the discount rate. c. The Fed de...

Q: If you deposit a $20 bill into a checking account and

If you deposit a $20 bill into a checking account and your bank has a 10 percent reserve requirement, by how much will the bank’s excess reserves rise?

Q: Jean Baptiste Colbert was the Minister of Finance under King Louis XIV

Jean Baptiste Colbert was the Minister of Finance under King Louis XIV of France. He famously observed, “The art of taxation consists in so plucking the goose as to obtain the largest possible amount...

Q: The basic model of pure competition reviewed in this chapter finds that

The basic model of pure competition reviewed in this chapter finds that in the long run all firms in a purely competitive industry will earn normal profits. If all firms will only earn a normal profit...

Q: Did the eventual recovery of the unemployment rate after the Great Recession

Did the eventual recovery of the unemployment rate after the Great Recession indicate recovery in all aspects of employment? Explain and give examples

Q: Suppose that as the output of mobile phones increases, the cost

Suppose that as the output of mobile phones increases, the cost of touch screens and other component parts decreases. If the mobile phone industry features pure competition, we would expect the long-r...

Q: There are 10 firms in an industry, and each firm has

There are 10 firms in an industry, and each firm has a market share of 10 percent. The industry’s Herfindahl index is: LO1 a. 10. b. 100. c. 1,000. d. 10,000.

Q: In the small town of Geneva, there are 5 firms that

In the small town of Geneva, there are 5 firms that make watches. The firms’ respective output levels are 30 watches per year, 20 watches per year, 20 watches per year, 20 watches per year, and 10 wat...

Q: Which of the following best describes the efficiency of monopolistically competitive firms

Which of the following best describes the efficiency of monopolistically competitive firms? a. Allocatively efficient by productively inefficient. b. Allocatively inefficient but productively efficie...

Q: Using diagrams for both the industry and a representative firm, illustrate

Using diagrams for both the industry and a representative firm, illustrate competitive long-run equilibrium. Assuming constant costs, employ these diagrams to show how (a) an increase and (b) a decr...