The budget deficit decreases during economic booms and increases during recessions.
Answer the following statement true (T) or false (F)
True
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If the Federal Reserve increases the money supply at the same time as an expansionary fiscal policy drives up budget deficits, we would expect to see income _____ and interest rates ____
a. changes be indeterminate; fall b. fall; fall c. rise; fall. d. rise; changes be indeterminate e. none of the above.
The discount rate is the interest rate
A) banks pay on certificates of deposit. B) the Fed pays on reserves held by banks. C) the Fed charges when it lends reserves to banks. D) banks charge their loan customers. E) on short-term Treasury securities.
What are menu costs?
A) the full list of a firm's costs of production B) the costs to a firm of changing prices C) the cost to a household of borrowing money when there is deflation D) the opportunity cost of dining in a restaurant instead of at home
Refer to the information provided in Figure 9.3 below to answer the question(s) that follow. 
Figure 9.3Refer to Figure 9.3. This firm will continue to operate in the short run, but incur an economic loss if price is
A. between $0 and $4. B. between $4 and $7. C. between $7 and $13. D. above $13.