During a depression, the best strategy of the Federal Reserve is to
A. sell government bonds, to make low-risk, sound assets available for commercial banks to buy.
B. sell government bonds, in order to reduce the size of the government's deficits.
C. sell government bonds, in order to increase aggregate demand.
D. buy government securities.
D. buy government securities.
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The circular flow shows that
A) aggregate production equals aggregate expenditure. B) aggregate expenditure is less than aggregate income. C) GDP equals aggregate income. D) Both answers A and C are correct.
How do firms in monopolistic competition compete?
What will be an ideal response?
Suppose that along the economy-wide rate-of-return line, the current interest rate of 8 percent causes a planned investment of $300 billion
Should the interest rate fall to 7 percent, the $300 billionth dollar of investment spending now generates a ________ rate of profit, which puts ________ pressure on investment. A) positive, downward B) positive, upward C) negative, downward D) negative, upward
Along a linear demand curve, as the price rises, demand becomes more
a. steep b. elastic c. inelastic d. unit elastic e. variable