The most frequently used tool of U.S. monetary policy is
a. the discount rate.
b. the reserve requirement.
c. open-market operations.
d. moral suasion.
c. open-market operations.
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The smaller the slope of the aggregate planned expenditure (AE) curve, the
A) larger are imports. B) smaller the multiplier. C) larger the multiplier. D) larger are exports. E) larger is the marginal tax rate.
In an economy with production function Y = 1.5 × , K = 343, and L = 512. If factor markets are in equilibrium, then the rental price of capital is (approximately) ________, and the real wage is (approximately) ________
A) 0.5; 0.8 B) 7; 8 C) 0.9; 1.35 D) 1.4; 0.4 E) 0.6; 0.9
The quantity theory of money and prices asserts that
A) increases in the money supply lead to inflation. B) increases in the money supply lead to an increase in the velocity of money. C) increases in the money supply lead to a decrease in the velocity of money. D) increases in the money supply will increase real GDP.
Economic inefficiency exists when
A. MR = MC. B. P > MC. C. P = MR. D. P = MC.