Use the following table to answer the next question. The money supply and investment are in billions.Money Supply (billions of dollars)Interest RateInvestment (billions of dollars)$507%$100606110705120804130903140Assume that the MPC is 0.8 and the reserve requirement is 0.1. If the Federal Reserve needs to decrease aggregate demand by $100 billion at each price level to move the economy back to full employment and the current interest rate is 5%, then the Federal Reserve should ________ the money supply by ________.
A. decrease, $20 billion
B. increase, $20 billion
C. increase, $10 billion
D. decrease, $10 billion
Answer: A
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Prof. Epstein's normative theory of law argues that the common law ought to
a. promote a more desirable distribution of income. b. impose punitive damages more often. c. seek economic efficiency. d. promote the Good Samaritan ethic.
The local symphony recently raised its price for tickets to their summer concerts in the park. At the end of the summer season, the symphony was surprised to see that total revenue had actually decreased. The reason was that the elasticity of demand for tickets was
A. unit elastic. B. inelastic. C. elastic. D. Not enough information is given.
The motivation for collective action is to do things that benefit society as a whole
a. True b. False
We can represent the entry of new firms into a monopolistically competitive market by shifting the existing firms':
a. demand curves downward. b. demand curves upward. c. demand curves more inelastic. d. cost curves upward. e. cost curves downward.