How does increasing wealth raise the cost of doing everything? By
A) bidding up the prices of labor-saving devices.
B) increasing the time required to earn and manage the wealth.
C) increasing the value of available alternatives.
D) raising the cost of hiring servants.
E) raising the rate of inflation.
C
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The marginal cost of an activity ________ as you do more of it
A) increases B) decreases C) doesn't change D) changes only if the marginal benefit of the activity does not change E) changes only if the marginal benefit of the activity changes
Suppose the Fed conducts an open market sale of $50 million in government securities. If the required reserve ratio is 20%, what is the maximum change in the money supply? Assume that banks try not to hold excess reserves and there is no currency withdrawal from the banking system.
A) maximum increase in money supply = $250 million B) maximum decrease in money supply = $250 million C) maximum increase in money supply = $50 million D) maximum decrease in money supply = $50 million