Question
1 .Which of the following would cause short-run aggregate supply to shift to the left? a. An increase in subsidies for a majority of firms
1.Which of the following would cause short-run aggregate supply to shift to the left?
a. An increase in subsidies for a majority of firms
b. A decrease in wage rates throughout the economy
c. New regulations and more strict enforcement of current regulations by OSHA regarding workplace safety conditions.
d. Increases in the level of technology cause structural changes in employment.
e. An increase in the level of human capital due to greater access to higher education
2.The central bank is considered the lender of last resort. When commercial banks borrow money from the central bank, the interest rate charged is known as the
a. Prime rate
b. Discount rate
c. Reserve rate
d. Federal funds rate
e. Market rate
3.The central bank raises the reserve ratio from 10% to 15%. Which of the following would be a potential reason for this change in policy?
a. Unemployment rates are rising
b. Money supply is growing too slowly and holding back economic growth
c. Core inflation expectations are high and the bank intends to maintain price stability by decreasing lending activity
d. Banks are not lending enough money, causing stagnation in the economy
e. Other central banks in the region have taken similar action.
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