According to the AS/AD model, if the economy is in a recession and the Fed wants to increase output and employment, it should:
A. raise reserve requirements.
B. act to increase the money supply.
C. act to decrease the money supply.
D. raise interest rates.
Answer: B
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What conditions might be required for an import-substitution policy to be effective? What advantages might it bring?
What will be an ideal response?
Efficient production of a public good requires a. that individuals pay for such goods according to benefits received
b. that each individual's MRS be equal to the RPT of public goods for private goods. c. that the sum of individuals' MRSs be equal to the RPT of public goods for private goods. d. that governments produce at the low point of the average cost curve for the public good.
A firm that experiences economies of scale has a ______ average cost curve.
A. positively-sloped B. negatively-sloped C. U-shaped D. flat
The combination of expansionary U.S. monetary policy and contractionary U.S. fiscal policy should:
A. raise the exchange rate if prices and income do not change. B. have an ambiguous effect on the exchange rate if prices and income do not change. C. not affect the exchange rate if prices and income do not change. D. reduce the exchange rate if prices and income do not change.