Question

11. A decrease in the availability of lower-cost drugs will tend to shift the ________ curve for medical services to the ________.

supply; right

supply; left

demand; left

demand; right

19. An increase in the discount rate ________ bank reserves and ________ the money supply if banks respond appropriately to the change in the rate.

increases; decreases

decreases; increases

increases; increases

decreases; decreases

Answer 1

11. Option B.

• Drugs are the intermediate goods used in the medical systems for treatments
• If availability of low cost drugs decreases, the demand for them in the medical field decreases.
• The medical systems will then provide lower medical services at every given price.
• Which means that the supply of medical services decreases.
• This causes the supply curve to shift leftwards.

19. Option D

• Discount rate is the federal interest rate that is set by central bank.
• When the discount rate rises,banks have less incentives to borrow from reserve banks.
• This will decrease the amount of reserves held by them,their by decreasing the money supply in the Economy.