If the Federal Reserve conducts open market ________, the money supply ________, shifting the LM curve to the left, everything else held constant
A) purchases; decreases
B) sales; decreases
C) purchases; increases
D) sales; increases
B
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The figure above shows that monopoly is ________ because it produces a level of output at which ________
A) inefficient; marginal benefit equals marginal cost B) efficient; marginal benefit equals marginal cost C) efficient; marginal benefit exceeds marginal cost D) inefficient; marginal benefit exceeds marginal cost E) efficient; producer surplus is maximized
Property and casualty insurance companies tend to invest heavily in municipal bonds because
A) the bonds have higher yields than corporate bonds. B) property and casualty insurance companies are required by regulators to hold at least 20 percent of their assets in the form of municipal bonds. C) the bonds are tax-exempt. D) they hold large state and local government pension funds, thus requiring them to hold an equal amount of municipal bonds.
Once a division manager sees that production goal for a time period is likely to be met
a. he has an incentive to increase the pace of production b. he has an incentive to decrease the pace of production c. he does not have an incentive to change the pace of production d. he has an incentive to produce other products
A reduction in the marginal tax-rate includes a substitution effect that tends to increase saving
a. True b. False Indicate whether the statement is true or false