Suppose the economy has a recessionary gap. By using an expansionary monetary policy, the Fed can
A. raise the price level alone, but cannot increase real GDP.
B. raise real GDP and the price level.
C. raise real GDP without increasing the price level.
D. raise real GDP and decrease the price level.
Answer: B
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If land suitable for growing corn is also suitable for growing soybeans, and soybeans were found to prevent cancer,
A) the demand for corn would decrease. B) there would be no effect on the cost of growing corn. C) the supply (curve) of soybeans would increase. D) the cost of growing corn would rise. E) the cost of growing corn would fall.
The addition of gasoline pumps at a grocery store is a good example of a network externality
Indicate whether the statement is true or false
MPK falls when production becomes more ________-intensive, meaning a ________ in v* and a ________ in net investment
A) labor, fall, fall B) labor, fall, rise C) labor, rise, fall D) capital, rise, rise E) capital, fall, fall
Four possibilities have probabilities 0.4, 0.2, 0.2 and 0.2 and values $80, $30, $0, and -$80 respectively. The expected value is:
a. $22 b. $24 c. $26 d. $28