QUESTION 131

1. An increase in the interest rate should ________ the demand for dollars and the value of the dollar, and net exports should ________.

   		increase; increase
   		decrease; decrease
   		increase; decrease
   		decrease; increase
   		increase; not change

1 points   

QUESTION 132

1. If the Federal Reserve targets the interest rate and the money demand curve shifts to the left, then the Fed

   		cannot maintain the interest rate target.
   		can maintain the interest rate target with no change in the money supply.
   		can maintain the interest rate target, but at a higher quantity of the money supply.
   		can maintain the interest rate target, but at a lower quantity of the money supply.

1 points   

QUESTION 133

1. An increase in the price level causes

   		a movement up along the money demand curve.
   		a movement down along the money demand curve.
   		the money demand curve to shift to the left.
   		the money demand curve to shift to the right.

1 points   

QUESTION 134

1. Falling interest rates can

   		lower the cost of buying new homes and fewer new homes will be purchased.
   		raise the cost of buying new homes and fewer new homes will be purchased.
   		raise the cost of borrowing for firms and decrease investment.
   		increase a firm's stock price, which causes firms to issue more stock shares, and thus increases funds for investment.

1 points   

QUESTION 135

1. If the amount you owe on your house is greater than the price of the house, you have

   		a mortgage rate that is too high.
   		a reverse mortgage on your house.
   		no value to your house.
   		negative equity in your house.

1 points   

QUESTION 136

1. Fiat money is generally issued by

   		private banks.
   		brokerage firms.
   		central banks.
   		major multinational corporations.

1 points   

QUESTION 137

1. According to the quantity theory of money, if the money supply grows at 6%, real GDP grows at 2%, and the velocity of money is constant, then the inflation rate will be

   		8%.
   		6%.
   		4%.
   		2%.

1 points   

QUESTION 138

1. An economy without money would have no exchanges of goods and services.

   True

   False

1 points   

QUESTION 139

1. From an initial long-run macroeconomic equilibrium, if the Federal Reserve anticipated that next year aggregate demand would grow significantly slower than long-run aggregate supply, then the Federal Reserve would most likely

   		decrease interest rates.
   		increase income tax rates.
   		increase interest rates.
   		decrease income tax rates.

1 points   

QUESTION 140

1. Article Summary

   With global borrowing costs so low, economic analysts are warning that central banks need to be prepared to set negative interest rates during the next economic downturn. Several central banks in Europe set negative interest rates in 2014, as did the Japanese central bank in 2016, in an attempt to spur lending. The global market value of negative-yielding bonds rose to $8.6 trillion in mid-2017 due to low inflation and increased perceptions of geopolitical risk. The current U.S. economic expansion is the third longest since the 19th century, and credit markets are showing signs of reaching a cyclical peak. According to Harvard professor Kenneth Rogoff, low interest rates this late in an economic cycle are unprecedented, noting that the Fed cut interest rates by an average of 5.5 percentage points in the nine recessions since the 1950s, and this would be impossible today without negative interest rates.
   Source: Sid Verma and Cecile Gutscher, "With Next Recession Looming, Central Banks Better Make Peace With Negative Rates," bloomberg.com, August 14, 2017.
   
   
   Refer to the Article Summary. Implementing a negative interest rate policy, as is discussed in the article summary, would be designed to ________ the price level and ________ real GDP.

   		decrease; decrease
   		increase; decrease
   		decrease; increase
   		increase; increase

QUESTION 145

1. If bankers become more uncertain regarding future deposits and withdrawals and choose to hold more excess reserves against deposits, the money multiplier will increase.

   True

   False

1 points   

QUESTION 146

1. A central bank can help stop a bank panic by

   		calling in consumer loans.
   		raising the required reserve ratio.
   		acting as a lender of last resort.
   		decreasing income taxes.

1 points   

QUESTION 147

1. If gold is used as money in an economy, the money supply is easy to control.

   True

   False

1 points   

QUESTION 148

1. During the German hyperinflation of the 1920s, the large increases in the money supply were generated by the German government

   		selling large quantities of government bonds to the central bank, the Reichsbank.
   		printing large quantities of German marks.
   		significantly lowering the required reserve ratio to enable German businesses to obtain loans.
   		significantly raising the required reserve ratio to reduce business loans.

1 points   

QUESTION 149

1. A decrease in the reserve requirement ________ bank reserves and ________ the money supply.

   		decreases; increases
   		increases; decreases
   		decreases; decreases
   		increases; increases

1 points   

QUESTION 150

1. Expansionary monetary policy refers to the Fed's increasing the money supply and increasing interest rates to increase real GDP.

   True

   False

1 points   

QUESTION 151

1. If people speculate that a run on one bank will cause a run on all banks in the financial system, and this speculation proves accurate, then the financial system would experience what is known as a

   		institutional death spiral.
   		bank panic.
   		commodity crisis.
   		securitization meltdown.

1 points   

QUESTION 152

1. Contractionary monetary policy to prevent real GDP from rising above potential real GDP would cause the inflation rate to be ________ and real GDP to be ________.

   		higher; higher
   		lower; lower
   		lower; higher
   		higher; lower

1 points   

QUESTION 153

1. A decrease in interest rates can ________ the demand for stocks as stocks become relatively ________ attractive investments as compared to bonds.

   		increase; more
   		increase; similar
   		decrease; less
   		decrease; more
   		increase; less

2. suppose there are three firms: Oil Pro, Grease Tech, and Luber. Each firm moves sequentially (i.e. Stackelberg Competition). Oil Pro is the first mover. Grease Tech is the second mover. Luber is the third and final mover. If the demand equation is P = 18 - Q (where Q is the sum of all the quantities), and the marginal cost of each firm MC=2, what quantity will Oil Pro release to market?

Suppose one market has a demand curve ?(?) = 100 − ??

（1）If this market has many firms supplying the identical products to the consumers, and the industry has a cost function ?(?) = 2? ^2. What are the market equilibrium price and quantity?

（2）What is the price elasticity of demand at the market equilibrium in (1)?

（3）If this market has only one firm supplying the products, with cost function ?(?) = 2?^2. What are the market equilibrium price and quantity now

（4）What is the price elasticity of demand at the market equilibrium in (3)? What can we conclude about the monopoly's profit-maximizing behavior regarding the price elasticity of demand?

（5）Illustrate consumer surplus, producer surplus and the total social welfare (total surplus) for the two cases. Based on your comparison, discuss the arguments for and/or against the monopoly.

Is it okay to cite or use (and not cite) information from Wikipedia?

1. When the social cost of producing a good is higher than the private cost, then

A) positive externalities exist.

B) there are no externalities.

C) negative externalities exist.

7. If pollution exist in a market,

A) the supply curve would be lower than optimum and the equilibrium quantity higher than optimum.

B) the supply curve would be higher than optimum and the equilibrium quantity lower than optimum.

C) the supply curve would be higher than optimum (efficient) and the equilibrium quantity higher than optimum.

9. Which of the following are examples of command-and-control regulation?

A) The U.S. government makes subsidies available to the manufacturing industries whose CO2 emissions exceed certain levels to install equipment to scrub the CO2 from their emissions.

B) The U.S. government determines solar panels are cleaner energy and subsidizes their use to reduce CO2 emissions from manufacturing industries.

C) The U.S. government requires firms to install antipollution equipment to improve air and water quality.

10. What are the benefits of clearly established property rights?

A) Responsible parties are identified and it helps increase negative externalities.

B) Business are incentivized to comply with regulations.

C) Responsible parties are identified and it helps reduce negative externalities.

With this assignment I would like for you to take a topic in economics and analyze it using the concepts and ideas developed in the course. You can follow the format for writing a paper on Wal-Mart, or you can choose to analyze any other applicable topic that interests you using the paper guidelines provided (under 'Assignments'/'Writing Assignment'; I've provided examples of papers and topics composed by previous instructors and students in this course). If you have questions and/or problems understanding the assignment or accessing the aforementioned information please let me know.

The writing assignment should be between 500 - 1000 words. It is due by the Saturday of finals week.

How might a company try to weigh fairly the opportunities and risks of investing in South Africa?

1. What are the costs and benefits to South Africa of having more foreign direct investment? Of having less?

The contributions of great theorists like Adam Smith, Karl Marx, Emile Durkheim, Max Weber, Fredrick Winslow Taylor, Mary Parker Follett, Henri Fayol, Chester Bernard, Immanuel Kant, Rene Descartes, and John Locke were presented in the text and discussed in class. Choose three of these theorists, explain why you chose them, and briefly explain their contribution to organization theory.

An online shopping website considers offering its customers a mail-in rebate program. By this way, it aims to differentiate between different groups of customers. After the completion of the purchase of a wireless router, consumers can mail a rebate form to receive $ back. In other words, the net price after the rebate is p*-a for those who are interested in the mail-in-rebate. The shopping website is a monopoly with no fixed cost. Its marginal cost is $30.

The Market consists of two different consumer groups whose demand functions are as follows:

The demand of the two groups are as follows;

P1=150-2q1

P2=100-5q2

Assuming that the consumers of group 1 are not interested in rebate forms,

a. What is the optimal rebate amount, which differentiates between different consumer groups?

b. Assume that the firm has enough information about its consumers to implement a perfect price discrimination strategy. Calculate the equilibrium price and quantities and the profit if the firm uses perfect price discrimination. (Do not derive the kinked market demand curve. Simple assume that the market demand is Q=95-07P)

1. Conduct personal research to define integrated assessment models (IAM). List the relevant components and how they "integrate" different fields of study.

Suppose that changes in bank regulations expand the availability of credit cards, so

that people need to hold less cash. Use the money demand and supply diagram in the long run to answer

the following:

a.   How does this event affect the demand for money? (explain with graph + words)

b. If the Bank of Canada does not respond to this event, what will happen to the price level?

c. If the Bank of Canada wants to keep the price level stable, what should it do? (show on graph + explain with words)

1. How did employees of Enron (and employees of the utilities company in Oregon) end up losing billions in retirement funds?