Suppose your expenses for this term are as follows: tuition: $9,000, room and board: $1,500, books and other educational supplies: $1,000
Further, during the term, you can only work part-time and earn $3,000 instead of your full-time salary of $8,000. What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college?
A) $10,000 B) $13,000 C) $15,000 D) $18,000
C
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The Fed sells a U.S. government security and a bank dealer writes a check for the amount. When the check clears
A) reserves remain unchanged because the decrease of reserves at the dealer's bank is offset by an increase in the reserves at the Fed. B) reserves have fallen by the amount of the reserves times the reserve ratio, and the money supply falls by the difference between the amount of the check and the fall in the reserves. C) reserves have fallen by the amount of the check because the Fed clears the check by reducing the bank's deposits at the Fed. D) reserves increase by the amount of the check because the Fed clears the check by increasing the amount of the bank's deposits with the Fed.
Generally, when the Federal Reserve lowers interest rates, investment spending ________ and GDP ________
A) decreases; increases B) increases; decreases C) increases; increases D) decreases; decreases