Other things being equal, a decrease in the price of ethanol will
A. decrease the use of corn in ethanol production but increase the use of corn in HFCS (another product produced from corn).
B. decrease the use of corn in ethanol production and in HFCS.
C. decrease the use of corn in all corn uses.
D. increase the use of corn in HFCS.
Ans: A. decrease the use of corn in ethanol production but increase the use of corn in HFCS (another product produced from corn).
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All else equal, as the price of oil rises, potential profits from producing oil ________ which ________ oil companies to look for additional sources of oil
A) increase; encourages B) increase; discourages C) decrease; encourages D) decrease; discourages
To offset the effect of households and firms deciding to hold more of their money in checking account deposits and less in currency, the Federal Reserve could
A) raise government spending. B) sell Treasury securities. C) raise bank taxes. D) lower the required reserve ratio.