An open market purchase by the Fed causes the value of the dollar to:

A. rise, increasing net exports.
B. rise, reducing net exports.
C. fall, increasing net exports.
D. fall, reducing net exports.


Answer: C

Economics

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Does a competitive long-run equilibrium require cost-minimization?

A) Yes, if firms fail to be as efficient as their competitors, they are driven out of the market. B) No, in the long run, firms make zero profits. C) Yes, if they didn't, even less efficient firms would enter the industry. D) No, because competition ensures their survival.

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Which of the following causes a leftward shift in the short-run aggregate supply curve?

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Milly Miser removes $250,000 from her mattress and opens a checking account. This single transaction immediately increases the money supply by

A. $250,000. B. $50,000. C. $0. D. ?$250,000.

Economics