Higher interest rates and, therefore, a decrease in investment spending are most likely to be caused by which policy mix?
A. Deficit reduction and expansionary monetary policy
B. Larger deficits and contractionary monetary policy
C. Larger deficits and expansionary monetary policy
D. Deficit reduction and contractionary monetary policy
Answer: B
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
An increase in the number of fast-food restaurants
A) raises the price of fast-food meals. B) increases the demand for fast-food meals. C) increases the supply of fast-food meals. D) increases the demand for substitutes for fast-food meals.
The agency that deals with issues of "unfair and deceptive acts or practices in commerce" is the
A. Federal Trade Commission. B. Federal Advertising Commission. C. Federal Products Commission. D. Federal Consumer Protection Agency.
Oligopoly differs from monopolistic competition in that an oligopoly includes
A) product differentiation. B) barriers to entry. C) no barriers to entry. D) downward-sloping demand curves facing the firm.