- Section 5.1: The interest rate is a. the opportunity cost of lending money. b. t...
- Section 5.2: Which of the following identities is true in a simplified economy w...
- Section 5.3: A budget surplus exists when the government does which of the follo...
- Section 5.4: Which of the following is a task of an economys financial system? a...
- Section 5.5: A financial intermediary that resells shares of a stock portfolio i...
- Section 5.6: Which of the following assets is most liquid? a. stock b. bond c. l...
- Section 5.7: When money acts as a means of holding purchasing power over time, i...
- Section 5.8: Which of the following is an example of using money as a unit of ac...
- Section 5.9: Which of the following is a desirable characteristic of money? a. f...
- Section 5.10: Fiat money derives its value from which of the following? a. its of...
- Section 5.11: The M1 money supply includes which of the following? a. near-moneys...
- Section 5.12: The present value of $1 you receive one year from now is equal to a...
- Section 5.13: If the interest rate is 2%, the amount received 1 year from now as ...
- Section 5.14: The liquid assets banks keep in their vaults are known as bank a. d...
- Section 5.15: The required reserve ratio is a. the most cash that banks are allow...
- Section 5.16: If rr is the reserve requirement, the money multiplier is equal to ...
- Section 5.17: Which of the following is part of the money supply but not part of ...
- Section 5.18: The Federal Reserve is a(n) a. single central bank located in New Y...
- Section 5.19: The Federal Reserve is charged with doing all of the following EXCE...
- Section 5.20: Which of the following will increase the demand for money? a. a fal...
- Section 5.21: The money supply curve is a. upward sloping. b. vertical. c. horizo...
- Section 5.22: When banking regulations were changed so that banks could pay inter...
- Section 5.23: Which of the following will shift the supply curve for loanable fun...
- Section 5.24: Crowding out is illustrated by which of the following changes in th...
- Section 5.25: The supply curve for loanable funds is a. upward sloping. b. vertic...
Solutions for Chapter Section 5: The Financial Sector
Full solutions for Krugman's Economics for AP® (High School) | 2nd Edition
a curve that shows the quantity of goods and services that firms choose to produce and sell at each price level
Arrow’s impossibility theorem
a mathematical result showing that, under certain assumed conditions, there is no scheme for aggregating individual preferences into a valid set of social preferences
the idea that people should pay taxes based on the benefits they receive from government services
fluctuations in economic activity, such as employment and production
a difference in wages that arises to offset the nonmonetary characteristics of different jobs
the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it
diseconomies of scal
the property whereby long-run average total cost rises as the quantity of output increases
the study of how society manages its scarce resources
the study of a company’s accounting statements and future prospects to determine its value
a small incremental adjustment to a plan of action
an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services
the ability of a single economic actor (or small group of actors) to have a substantial influence on market prices
an institution that sells shares to the public and uses the proceeds to buy a portfolio of stocks and bonds
a situation in which economic actors interacting with one another each choose their best strategy given the strategies that all the other actors have chosen
total revenue minus total cost
real interest rate
the interest rate corrected for the effects of inflation
two goods for which an increase in the price of one leads to an increase in the demand for the other
tax on goods produced abroad and sold domestically
theory of liquidity preference
Keynes’s theory that the interest rate adjusts to bring money supply and money demand into balance
the study of how the allocation of resources affects economic well-being