An increase in the government budget deficit is most likely to result in an increase in which of the following?
A) The marginal propensity to consume
B) Exports
C) The real interest rate
D) The money supply
E) The simple multiplier
Answer: C) The real interest rate
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Suppose the figure below shows the demand curve, marginal revenue curve and marginal cost curve for a monopolist. 
At this monopolist's profit-maximizing level of output, its total revenue equals the area:
A. 0FLE. B. ELJB. C. 0HNC. D. 0FJB.
In the specific factor model, the effect of an increase in the productivity of labor in the production of cloth will cause a(an) ________ in the quantity of labor used to produce cloth, a(an) ________ in the quantity of labor used to produce food and
a(an) ________ in the wage rate. A) increase; decrease; increase B) decrease; increase; increase C) increase; decrease; decrease D) decrease; increase; no change E) increase; increase; no change
The use of the same cost of capital (risk adjusted discount rate) for all capital projects in a corporation
A) is usually the correct procedure. B) is incorrect since different divisions of the corporation may be faced with different levels of risk. C) is incorrect since different capital projects, even in the same division, may be faced with different levels of risk. D) Both B and C
If the Fed buys more bonds from the public, and increases the price it is willing to pay for the bonds, what will happen to interest rates?
A. They will rise. B. They will fall. C. They will remain unchanged. D. The relationship between bond prices and interest rates is unclear.