Suppose the economy experiences a recessionary gap. Expansionary monetary policy will
A) increase interest rates and increase exchange rates.
B) increase interest rates and decrease exchange rates.
C) decrease interest rates and increase exchange rates.
D) decrease interest rates and decrease exchange rates.
Ans: D) decrease interest rates and decrease exchange rates.
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Which of the following goods is rival in consumption and is also excludable?
A) A fireworks display B) A movie shown on cable television C) A DVD D) A magic show in a public park.
Lizzie's budget line is shown in the figure above. The relative price of a magazine is ________ per magazine
A) 2 cookies B) 0.5 of a cookie C) $1 D) $2
When the Fed supplies the banking system with an extra dollar of reserves, deposits ________ by ________ than one dollar—a process called multiple deposit creation
A) increase; less B) increase; more C) decrease; less D) decrease; more
In general, technology that reduces pollution will shift both the MC and ATC curves upward.
Answer the following statement true (T) or false (F)