Refer to the information provided in Figure 7.8 below to answer the question(s) that follow. 
Figure 7.8Refer to Figure 7.8. The slope of isocost CD is
A. greater than the slope of isocost AB.
B. less than the slope of isocost AB.
C. equal to the slope of isocost AB.
D. indeterminate from this information, as the prices of capital and labor are not given.
Answer: C
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When the central bank sells $1,000,000 worth of government bonds to the public, the money supply:
A. increases by $1,000,000. B. decreases by $1,000,000. C. decreases by more than $1,000,000. D. decreases by less than $1,000,000.
The government's budget deficit is financed by some combination of all of the following except
A) private saving. B) transfer payments. C) net exports. D) reduced private investment.
When new firms choose to enter monopolistically competitive markets: a. there must be little diversity of products in the market
b. they are guaranteed economic profits upon entry. c. some firms in the market must be making economic profits. d. the demand curve faced by an established firm will shift to the right as a result.
If the Fed reduces its discount rate, the problem being addressed is more likely to be inflation than recession
Indicate whether the statement is true or false