To close an expansionary gap, the Fed ________ interest rates which ________ aggregate spending and ________ short-run equilibrium output.
A. raises; decreases; increases
B. raises; decreases; decreases
C. raises; increases; increases
D. reduces; increases; decreases
Answer: B
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Rich and poor people have which of the following in common?
A) Scarcity B) Economizing behavior C) Pursuing the plans and projects in which they are interested D) All of the above. E) None of the above.
Which of the following is correct concerning a risk-averse person?
a. She would not play games where the probability of winning and losing a dollar are the same. b. She might not buy health insurance if she thinks her risks are low. c. Her marginal utility of wealth decreases as her income increases. d. All of the above are correct.
When 5 units of labor are employed, total product is 10 units; when 6 units of labor are employed, total product is 11 units of output. If the price of output is $5 per unit, what is the marginal revenue product of the 6th unit of labor?
A. $5 B. $55 C. $15 D. $10
The case for advertising includes the fact that
A. it wastes society's scarce resources. B. it creates wants that otherwise would not have existed. C. it provides consumers with valuable information about product availability, quality, and price. D. firms spend large sums of money to create meaningless differences among products.