Start from an initial triple intersection of the IS, LM, and FE curves. Before anything else adjusts, a shift to an expansionary monetary policy results in a(n)
A. overall balance of payments surplus.
B. increase in domestic interest rates.
C. decrease in domestic output.
D. overall balance of payments deficit.
Answer: D
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Downsizing is the practice of laying off workers in an attempt to decrease average total cost. Can laying off workers decrease average total cost? Is it possible for the firm to downsize and have its average total cost increase? Explain your answer
What will be an ideal response?
A local government currently has a tax base of $10 million and a tax rate of 10 percent. If the tax rate is increased to 12 percent, the tax base becomes $8.5 million. If the goal is to maximize tax revenues the tax rate should be
A) raised above 12 percent. B) kept at 10 percent. C) raised to 12 percent. D) abolished.
Related to the Economics in Practice on page 218: A study discussed in the Economics in Practice found that NFL teams tend to ________ for the top pick in the annual player draft in terms of trades they make, ________ player productivity.
A. overpay; underestimating B. overpay; overestimating C. underpay; overestimating D. underpay; underestimating
The law of diminishing marginal utility implies that total utility never reaches a maximum.
Answer the following statement true (T) or false (F)