When the Fed announces that it is raising the federal funds rate, this signals its intention to _______ bonds in the open market and _______ the money supply.
A. Buy; reduce
B. Buy; increase
C. Sell; reduce
D. Sell; increase
C. Sell; reduce
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Refer to Figure 16-5. Suppose the firm represented in the diagram decides to practice perfect price discrimination. What is the profit-maximizing quantity?
A) 320 units B) 480 units C) 560 units D) 640 units
Suppose that a perfect-maximizing monopolist operates with a horizontal marginal cost curve and no fixed costs. Which of the following would NOT be represented as part of the area between its demand curve and marginal cost curve?
A) total costs B) economic profits C) consumer surplus D) deadweight loss
Consumer equilibrium occurs where the budget line is tangent to the:
A. lowest possible indifference curve. B. highest possible indifference curve. C. utility maximizing indifference curve. D. utility equalization indifference curve.
When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, which of the following curves is vertical?
A) SRAS B) AD C) LRAS D) None of the above