In Figure 3.1, if demand is considered perfectly inelastic, then the appropriate figure is?
a. Figure 1
B. Figure 2
c. Figure 3
d. Figure 4
Answer: B. Figure 2
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Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________. 
A. Rising; A B. Falling; A; C C. Falling; B: C D. Rising; A; C
If the Fed chooses to sell bonds on the open market, it is attempting to:
a) lower interest rates using expansionary monetary policy. b) lower interest rates using contractionary monetary policy. c) raise interest rates using expansionary monetary policy. d) raise interest rates using contractionary monetary policy.
One principal advantage of the corporations is that owners:
A. are sole proprietors. B. are not taxed for income received. C. have limited liability. D. always control the company.
Sources of market failure include
A. public goods. B. external costs. C. external benefits. D. All of the above are correct.