Suppose the Fed is targeting real GDP. If the interest rate is below its forecast and the Fed is convinced that this is due to commodity demand instability, it will ________ the money supply, which turns out to be exactly the wrong thing to do if the
low interest rate is in fact due to ________ money demand. A) raise, high
B) raise, low
C) lower, high
D) lower, low
B
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When compared to a perfectly competitive market, a single-price monopoly with the same costs produces ________ output and charges ________ price
A) a larger; a lower B) a smaller; a lower C) the same; a higher D) a smaller; a higher E) a smaller; the same
When every good or service is produced up to the point where the last unit provides ________, allocative efficiency occurs
A) a marginal benefit to society greater than the marginal cost of producing it B) a marginal benefit to society equal to the marginal cost of producing it C) a marginal benefit to society less than the marginal cost of producing it D) a marginal benefit to society equal to zero
Jason, a high-school student, mows lawns for families in his neighborhood. The going rate is $12 for each lawn-mowing service
Jason would like to charge $20 because he believes he has more experience mowing lawns than the many other teenagers who also offer the same service. If the market for lawn mowing services is perfectly competitive, what would happen if Jason raised his price? A) If Jason raises his price he would lose all his customers. B) He would lose some but not all his customers. C) Initially, his customers might complain but over time they will come to accept the new rate. D) If Jason raises his price, then all others supplying the same service will also raise their prices.
Which situation would most likely shift the production possibilities curve for a nation in an outward direction?
A. An increase in the amount of discrimination B. A decrease in the state of technology C. An increase in the supply of resources D. A decrease in the quality of products