If policy makers wanted to use both monetary and fiscal policy to stimulate demand and reduce a high rate of unemployment, which of the following would be most appropriate?
a. A larger budget deficit and the purchase of securities in the open market by the Fed
b. A government surplus and the sale of securities in the open market by the Fed
c. A larger government deficit and an increase in the discount rate
d. A larger government surplus and a reduction in the discount rate
a
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Which statement best illustrates the concept of diminishing marginal utility?
A. Some consumers will receive less satisfaction from consuming pizza than from consuming hamburgers. B. As one consumes more slices of pizza for lunch, one would be willing to pay a higher price for additional slices. C. A typical consumer will receive less satisfaction from consuming the third slice of pizza for lunch than from the second slice. D. A decrease in the price of slices of pizza will cause consumers to buy more slices for lunch, because they can afford to buy more.
In the short run, expansionary fiscal policy usually will
A) decrease the price level and decrease real GDP. B) increase the price level and increase real GDP. C) decrease the price level and increase real GDP. D) increase the price level and decrease real GDP.
The paramount goal of a firm is to
A) maximize profit. B) maximize sales. C) maximize total revenue. D) minimize costs. E) force its competitors into bankruptcy.
In June, buyers of titanium expect that the price of titanium will fall in July. What happens in the titanium market in June, holding everything else constant?
A) The quantity demanded increases. B) The demand curve shifts to the left. C) The quantity demanded decreases. D) The demand curve shifts to the right.