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D089 - Study Guide Questions Module 1-9 Principles of Economics Study Guide Questions and Answers 2023 / 2023
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D089 - Study Guide Questions Module 1 – The Economic Way of Thinking
societal demands. People are discouraged from innovating and are required to follow orders and keep with the central plan.
Module 3 – Supply, Demand and Elasticity
Price controls stop those supplying and those demanding from completing transactions both parties would be willing to make.
A building you already own is an implicit cost. Payroll is an explicit cost.
The average total cost goes down. Module 6 – Market Structures
Firm B 20% Firm C 20% Firm D
Firm E 15% 4 Firm is 85; HHI is 2150 Module 7 – Macroeconomic Measurements and Theories
Module 8 – Economic Growth and Fluctuations
supply. Setting reserve requirements: holding a portion of deposits and not lending it out, operating the discount window – the amount of money banks must have on hand at the end of the day, or they need to borrow from other banks or the FEC, conducting open market operations.
The Fed buy or sell Treasury Notes or mortgage-backed securities which increases or decreases the money supply and paying interest on reserves. The FED encourages banks to hold reserves rather than make loans which reduces the money supply. To increase the money supply, the FED lowers the interest paid on reserves, providing banks an incentive to make loans.