If there is a recession, the Fed would most likely encourage banks to provide loans by:
A. buying government securities.
B. raising the discount rate.
C. selling government securities.
D. raising the federal funds rate.
Answer: A
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The requirement that certain professionals possess a license in order to work in a particular market has the effect of reducing the supply of those services, which in turn causes:
A) price and the profits of firms in the market to increase. B) price and the profits of firms in the market to decrease. C) price to increase and the profits of firms in the market to decrease. D) price to decrease and the profits of firms in the market to increase.
Refer to the graphs below. Graph A is constructed on the basic assumption that:
In the graphs below, QP refers to the economy's potential output level.
A. The price level is not flexible
B. Nominal wages are unresponsive to price-level changes
C. Real output is unresponsive to price-level changes
D. Unemployment is unresponsive to price-level changes