In reaction to the terrorist attacks of September 11, 2001, the Federal Reserve moved to lower interest rates. This was intended to
A. increase aggregate demand.
B. decrease aggregate supply.
C. increase aggregate supply.
D. decrease aggregate demand.
Answer: A
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If the natural unemployment rate is 5.5 percent, then the economy is in a recessionary gap when the actual unemployment rate is
A) greater than 5.5 percent. B) between 0 and 5.5 percent. C) 0 percent. D) 5.5 percent.
Socialism is similar to communism in that ________.
A) the government provides all of the social services B) the governments fail under economic stress C) the government distributes goods and services D) the government experiences shortages of goods and services E) the government does not intervene in industry
An oligopolist faces a demand curve that is steeper at higher prices than at lower prices. Which of the following is most likely?
A. Other firms match price reductions but do not match price changes. B. The firm competes with others in the Bertrand fashion. C. The firm competes with others in the Cournot fashion. D. Other firms match price increases but do not match price reductions.
Figure 18.3Refer to Figure 18.3. The opportunity cost of producing pogo sticks in Livonia is:
A. 2/3 of a scooter. B. 4/5 of a scooter. C. 6/5 scooters. D. 1.25 scooters.