If the Fed wishes to reduce inflation then it should
a. increase the discount rate.
b. decrease reserve requirements.
c. buy government securities on the open market.
d. Do any of the above.
a. increase the discount rate.
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A decrease in the personal income tax rate ________ disposable income which ________ consumption
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
Assuming the market is in equilibrium in the graph shown with demand D and supply S2 at a quantity of 8, consumer surplus is:
A. $32.
B. $11.
C. $7.
D. equal to the producer surplus.
Monopolistic competition tends to lead firms to have wasted capacity. Why?
The notion that stock prices reflect all current available information:
A. indicates that mutual fund managers will not, on average, outperform market averages. B. makes it easier to predict the movements in the price of a stock. C. says stock prices should be more rigid than they are. D. makes the risk of holding stocks greater.