If the Fed wants to increase the money supply, it can:
A. pass a law that interest rates rise.
B. buy bonds.
C. pass a law that interest rates fall.
D. sell bonds.
Answer: B
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Suppose that the basket of goods purchased by the typical consumer costs $188.80 this year and it cost $160 in the base year. The CPI this year would be
A) 28.8. B) 85.11. C) 118.0. D) 348.8.
As the number of firms in a Cournot oligopoly ________, the equilibrium quantity gets closer to the ________ equilibrium quantity.
A) decreases; perfectly competitive B) increases; monopoly C) increases; perfectly competitive D) decreases; monopolistically competitive
Tax incidence:
A. depends on the relative elasticity of the supply and demand curves in a market. B. depends on whether it is a buyers tax or sellers tax that is being imposed. C. depends on the amount of tax revenue generated once administrative burdens are taken into account. D. depends on whether the tax revenue is greater than the deadweight loss caused by the tax.
Senator Blacklung represents a state that grows a significant amount of tobacco. Not only do many of his constituents work for businesses in this industry, but the tobacco firms also make generous contributions to his reelection campaign. According to public choice theory, which of the following bills would Senator Blacklung be most likely to support?
a. a bill proposing an increase in the tax on cigarettes to fund urban renewal programs across the nation b. a bill that would provide substantial subsidies for tobacco growers c. a bill proposing increased funding for a national antismoking awareness campaign financed by an increase in the tax on cigarettes d. a bill that would prohibit senators from accepting campaign contributions from firms who are involved in the production or sale of tobacco products