In the above figure, if the economy is at equilibrium at E1, the Fed would most likely
A. attempt to lower the aggregate demand in the economy.
B. adopt an expansionary monetary policy.
C. adopt a contractionary monetary policy.
D. attempt to lower the price level below 120.
Answer: B
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The U.S. interest rate minus the foreign interest rate is called the ________
A) foreign interest rate differential B) U.S. bond rate differential C) U.S. interest rate differential D) U.S. stock yield differential
The beginning of antitrust law is found in the
A) 1914 Clayton Act. B) 1890 Sherman Act. C) 1947 Taft-Hartley Act. D) 1950 Cellar-Kefauver Act.
Alice has spent all of her income on ten different goods, and knows that the marginal utilities per dollar spent on the ten goods are equal. Which of the following statements is correct?
a. She could possibly increase her total utility by redistributing her income among the ten items. b. She has violated the assumption of rationality. c. The law of diminishing marginal utility does not apply to her. d. Any reallocation of income among the ten items will reduce her total utility. e. She must be at a point inside of her budget line.
The primary means by which a farmer can protect against weather-related crop failure is with
A. stock markets. B. overtime labor. C. bond markets. D. crop insurance.