If the Fed wishes to reduce unemployment during a recession then it should
a. increase the discount rate.
b. decrease reserve requirements.
c. sell government securities on the open market.
d. Do any of the above.
b. decrease reserve requirements.
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Carolyn spends her income on popular magazines and music CDs. If the price of a CD is four times the price of a magazine and if Carolyn is maximizing her utility, she buys
A) four times as many CDs as magazines. B) both goods until the marginal utility of the last magazine purchased is four times the marginal utility of the last CD purchased. C) both goods until the marginal utility of the last CD purchased is four times the marginal utility of the last magazine purchased. D) four times as many magazines as CDs.
Total Expenditure equals
What will be an ideal response?
The more bowed the Lorenz curve, the
A. less accurate the Gini coefficient. B. less reliable the Gini coefficient as a measure of income distribution. C. lower the Gini coefficient. D. higher the Gini coefficient.
In a market with perfectly competitive firms, the market demand curve is usually ____ and the demand curve facing each individual firm ____.
A. upward sloping; horizontal B. downward sloping; horizontal C. horizontal; downward sloping D. downward sloping; downward sloping