An increase in nominal GDP (with inflexible prices) results in:
a. an increase in the nominal rate of interest.
b. an increase in the U.S. dollar exchange rate.
c. a decrease in the nominal rate of interest.
d. increased price and wage flexibility.
Ans: a. an increase in the nominal rate of interest.
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When the Fed raises the required reserve ratio, it:
a. lowers the cost of borrowing from the Fed, encouraging banks to make loans to the general public. b. raises the cost of borrowing from the Fed, discouraging banks from making loans to the general public. c. increases the amount of excess reserves that banks hold, encouraging them to make loans to he general public. d. increases the amount of excess reserves that banks hold, discouraging them from making loans to the general public. e. decreases the amount of excess reserves that banks hold, discouraging them from making loans to the general public.
Monopolies and oligopolies both erect barriers to entry through the use of
A) price cutting. B) patents. C) franchising. D) advertising.