If the economy is inflationary, the Fed would most likely:
A. increase bank reserves by raising the discount rate.
B. increase bank reserves by buying government securities
C. decrease bank reserves by lowering the discount rate.
D. decrease bank reserves by selling government securities.
Answer: D
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In perfect competition, the marginal revenue of an individual firm
A) is zero. B) is positive but less than the price of the product. C) equals the price of the product. D) exceeds the price of the product.
A firm in a perfectly competitive market
a. can raise the price of its product and sell more output b. can lower the price of its product and sell more output c. can increase its supply to lower the price d. can decrease its supply to raise the price e. accepts the market price for its product
According to the misperceptions theory of aggregate supply, if a firm thought that inflation was going to be 5 percent and actual inflation was 6 percent, then the firm would believe that the relative price of what it produce had
a. increased, so it would increase production. b. increased, so it would decrease production. c. decreased, so it would increase production. d. decreased, so it would decrease production.
What exists when the consequences of the actions of one person spill over to another person?
a. externality b. signal c. free ride d. moral hazard