Central banks can increase the money supply by:
a. Raising margin requirements.
b. Selling government securities.
c. Buying foreign exchange.
d. Increasing the discount rate.
e. None of the above.
.C
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Use the following graphs to answer the next question.
In the graphs, the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the levels of investment spending associated with each curve. All figures are in billions. A shift in the aggregate demand curve from AD3 to AD2 can be achieved by Federal Reserve action to ________.
A. buy government securities in the open market B. increase the reserve requirement C. sell government securities in the open market D. increase the discount rate
Which of the following is TRUE of the European Union's cap-and-trade program?
A. Governments subsidize firms to develop devices to reduce pollution. B. Firms are forced to shut down when they exceed their pollution limits. C. Firms can trade pollution permits to meet their pollution limits. D. Firms are taxed based on the their pollution levels.
The Taste Freeze Ice Cream Company is a perfectly competitive firm producing where MR = MC. The current market price of an ice cream sandwich is $5.00. Taste Freeze sells 200 ice cream sandwiches. Its AVC is $4.00 and its AFC is $3.00. What should Taste Freeze do?
A. Continue to produce because price exceeds AVC. B. Shut down and produce zero sandwiches because price is less than ATC. C. Increase production so that AFC will decrease. D. Decrease production so that AVC will decrease.
Which of the following is most likely to discourage international trade?
A) Higher import tariffs B) Higher export subsidies C) Lower interest rates D) Lower income tax rates Industria is predominantly a producer and exporter of manufactured goods. However, it imports several agricultural products.