If the Fed raises its target for the federal fund rate, this indicates that
A) the Fed is pursuing an expansionary monetary policy.
B) the Fed is pursuing a contractionary monetary policy.
C) the Fed is attempting to combat deflation.
D) The Fed is concerned that the growth in aggregate demand is too slow to keep up with potential GDP.
Answer: B
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In a competitive labor market a firm will continue to employ workers for as long as an additional worker's marginal revenue product exceeds the wage rate
a. True b. False Indicate whether the statement is true or false
The change in saving divided by the change in income is the
a. ratio of saving to income b. same as saving divided by income c. average propensity to save d. marginal propensity to consume e. marginal propensity to save
A decrease in the money supply
a. lowers the interest rate, causing a decrease in investment and a decrease in GDP b. lowers the interest rate, causing a decrease in investment and an increase in GDP c. raises the interest rate, causing an increase in investment and a decrease in GDP d. raises the interest rate, causing an increase in investment and an increase in GDP e. raises the interest rate, causing a decrease in investment and a decrease in GDP
When there is a technological advance in the ice cream industry, consumer surplus in that market will
a. increase. b. decrease. c. not change, since technology affects producers and not consumers. d. not change, since consumers' willingness to pay is unaffected by the technological advance.