Discuss the correct and incorrect economic analysis in the following statement
"If good weather in Hawaii creates a bumper crop of pineapples, the supply of pineapples will increase.
This will result in a price decrease, which will then cause the supply of pineapples to decrease."
The supply of pineapples will increase resulting in a lower equilibrium price and a higher equilibrium quantity but the lower price will not shift the supply curve for pineapples.
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When the Federal Reserve sells government bonds to the public, it:
a. increases the M1 money supply and increases the reserves of the commercial banking system. b. increases the M1 money supply, while reducing the reserves of the commercial banking system. c. reduces the M1 money supply, while increasing the reserves of the commercial banking system. d. reduces the M1 money supply and decreases the reserves of the commercial banking system.
The face value of a bond is
A) the dollar amount that a person would receive if he or she were to sell the bond. B) the dollar amount that a person would receive if he or she were to buy the bond. C) the total value of payments that will be made over the course of the bond's life. D) the dollar amount of the bond's final payment at maturity.