In the short run, lowering the federal funds rate shifts the aggregate demand curve ________ so that real GDP ________ and the price level ________
A) leftward; decreases; rises
B) rightward; increases; rises
C) rightward; decreases; rises
D) leftward; decreases; falls
E) rightward; increases; falls
B
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Marginal cost can be determined best by observing changes in
a. average total cost. b. total variable cost. c. total fixed cost. d. total cost/marginal product.
Which of the following is not among the functions of contract?
a. to provide incentives for efficient reliance b. to reduce transaction costs c. to discourage the development of asymmetric information d. to provide risk allocation mechanisms
Economic efficiency requires that Pareto improvements still be possible
a. True b. False
Refer to the figure. Assuming this market is representative of the economy as a whole, this economy:
A. is highly susceptible to recessions and high unemployment.
B. faces regularly fluctuating output levels in response to demand shocks.
C. is capable of always producing at its optimal capacity.
D. can only lessen the impacts of business cycles through active government policy.