Suppose you read in the paper that the Federal Reserve plans to expand the money supply. The Fed is most likely to do this by
A) printing more currency and distributing it.
B) purchasing government bonds from the public.
C) selling government bonds to the public.
D) buying newly issued government bonds directly from the government itself.
B
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
The number of brands of identical products will most likely increase as
A) the number of informed consumers increases. B) the cost of producing many brands decreases. C) the number of uninformed consumers decreases. D) None of the above.
When an external cost exists in the production of a good, firms tend to
A) under-produce the good since society pays these costs. B) over-produce the good. C) keep production constant throughout the year. D) under-allocate resources to the production of the good.
In perfect competition, marginal revenue always equals
a. total revenue. b. price. c. average cost. d. marginal fixed cost.