An increase in the demand for a resource
a. will cause the price of that resource to fall.
b. may be the result of a decrease in the demand for products utilizing this resource.
c. will cause the price of the resource to fall by a smaller amount in the short run than in the long run.
d. will increase the price of the resource and, thereby, increase the incentive of potential suppliers to provide the resource in the future.
D
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Is variability in velocity more of a problem in high or low inflation countries? Explain.
What will be an ideal response?
The money supply in Macroland is currently 2,500, bank reserves are 200, currency held by public is 500, and banks' desired reserve/deposit ratio is 0.10. Assuming the values of the currency held by the public and the desired reserve/deposit ratio do not change, if the Central Bank of Macroland wishes to increase the money supply to 3,000, then it should conduct an open-market ________ government bonds.
A. sale of 500 B. purchase of 250 C. purchase of 50 D. sale of 50