Which one of the following is an example of discretionary fiscal policy used to correct a recessionary gap?
A. an increase in the money supply by the Federal Reserve
B. a decrease in government expenditures approved by Congress
C. a tax decrease passed into law by Congress
D. an agreement among major banks to raise interest rates
Answer: C
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Which of the following statements about third-degree price discrimination is correct?
A. Successful third-degree price discrimination will generally result in a greater level of output than would be the case under a single-price pure monopoly. B. Successful third-degree price discrimination does not require that different groups of consumers have different demand elasticities. C. Successful third-degree price discrimination does not require that the producer separates customers into easily identifiable groups. D. Successful third-degree price discrimination will not provide the firm with more total profits than if it does discriminate.
The production possibilities frontier is the boundary between the
A) rational and irrational choices facing a society. B) wanted and unwanted combinations of goods and services. C) goods and services that the economy can produce. D) affordable and unaffordable combinations of production. E) attainable and unattainable combinations of goods and services.
The purchase of Treasury securities by the Federal Reserve will, in general,
A) increase the quantity of reserves held by banks. B) decrease the quantity of reserves held by banks. C) not change the money supply. D) not change the quantity of reserves held by banks.
Over a year, the money supply in a nation grew by 8 percent, while velocity rose by 2 percent and real GDP rose by 3 percent. This results in an inflation over the year of ________ percent
A) 7 B) 9 C) 13 D) 3