Because price and quantity demanded are inversely related,
a. the demand curve is usually upward-sloping
b. buyers purchase more of the good as the price rises
c. the supply curve must be rising
d. price and quantity supplied must be positively related
e. the demand curve is usually downward-sloping
E
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Depository institutions must
A) keep a certain percentage of their deposits as reserves. B) use and pay for the services of the Federal Reserve System. C) turn over a percentage of their profits to the Federal Reserve System as payment for services provided by the Fed. D) set their interest rates according to schedules established by the Federal Reserve System.
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower