To close a recessionary gap, the Fed ________ interest rates which ________ aggregate spending and ________ short-run equilibrium output.

A. raises; decreases; decreases
B. raises; decreases; increases
C. reduces; increases; increases
D. reduces; increases; decreases


Answer: C

Economics

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Economics

Economics is considered to be one of ______________ disciplines

a. natural science b. mathematical c. humanities d. social science e. fine arts

Economics

A monopoly produces widgets at a marginal cost of $8 per unit and zero fixed costs. It faces an inverse demand function given by P = 38 ? Q. Suppose fixed costs rise to $200. What will happen in the market?

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Economics

Suppose Jordan and Lee are trying to decide what to do on a Friday. Jordan would prefer to see a comedy while Lee would prefer to see a documentary. One documentary and one comedy are showing at the local cinema. The payoffs they receive from seeing the films either together or separately are shown in the payoff matrix below. Both Jordan and Lee know the information contained in the payoff matrix. They purchase their tickets simultaneously, ignorant of the other's choice. Suppose a timing element is added to the game, and that Jordan buys a ticket first. Then, after seeing Jordan's choice, Lee buys a ticket. What will be the equilibrium outcome?

A. Jordan will buy a ticket to the documentary and Lee will buy a ticket to the comedy. B. Both Jordan and Lee will buy a ticket to the comedy. C. Jordan will buy a ticket to the comedy and Lee will buy a ticket to the documentary. D. Both Jordan and Lee will buy a ticket to the documentary.

Economics