If the federal government is reducing net taxes to stimulate the economy at the same time the Fed is selling bonds in the open market, the effectiveness of the expansionary fiscal policy will be
A) increased, because the Fed'?s actions will result in higher interest rates.
B) reduced, because the Fed'?s actions will result in higher interest rates.
C) increased, because the Fed'?s actions will result in lower interest rates.
D) reduced, because the Fed'?s actions will result in lower interest rates.
Answer: B) reduced, because the Fed'?s actions will result in higher interest rates.
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In a collusive oligopoly, joint profits are maximized when a price leader establishes price based on: a. its own demand and cost schedules
b. the market demand for the product and the marginal costs of the various firms. c. the market demand for the product and its own marginal cost schedule. d. the demand curve faced by a typical competitor and its own marginal cost curve.
Why did the U.S. price of imports of compact trucks (like the Toyota Tacoma) not increase by 25% when the U.S. Customs Service reclassified them as "complete or unfinished trucks" with a tariff of 25%?
a. U.S. truck dealers that retailed imported compact trucks lowered their retail prices and absorbed part of the tariff. b. U.S. consumers negotiated lower retail prices from U.S. truck dealers selling imported compact trucks. c. The U.S. government decided not to collect the 25% tariff on imported Japanese compact trucks and instead made them subject to voluntary export restraints. d. Japanese truck manufacturers lowered their prices on trucks sold in the U.S. market and absorbed part of the tariff.
Economic activity around the world is mainly organized by
A. market transactions. B. informal arrangements. C. family connections. D. Internet connections.
Money is destroyed when:
A. loans are made. B. loans are repaid. C. checks written on one bank are deposited in another bank. D. the net worth of the banking system declines.