When the Fed buys securities from a bank, what happens to the monetary base and the quantity of money? Which changes by more or do both change by the same amount?
What will be an ideal response?
When the Fed buys securities from a bank, both the monetary base and the quantity of money increase. As reflected by the money multiplier, the increase in the quantity of money exceeds the increase in the monetary base.
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If the price of a good increases and the total revenue also increases, the good has a(n)
A) elastic demand. B) inelastic demand. C) unit elastic demand. D) perfectly elastic demand.
Market prices generally promote social cooperation because they
a. clarify the options available to people and encourage individuals to help others in exchange for income. b. encourage government officials to levy taxes to provide people with the necessities of life. c. eliminate scarcity by allowing prices to rise. d. reward only altruistic actions, whereby, people seek to help others without the expectation of personal gain.