When interest rates are artificially lowered through expansionary monetary policy,
A) longer-term investment projects appear to be more profitable.
B) production of capital goods increases.
C) the economy experiences an unsustainable boom phase.
D) the economy will likely fall into a recession in the longer run.
E) all of the above tend to occur.
E
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The straight-line production possibilities curve introduced in the text
A) is not subject to increasing opportunity costs. B) fails to reflect tradeoffs. C) fails to benefit trading nations. D) refutes the principles of comparative advantage. E) All of the above.
Approximately two-thirds of chemical pollution in the water comes from non-point pollution such as runoff from agricultural pesticides and fertilizer
Indicate whether the statement is true or false
An open market purchase by the Fed
A) decreases the supply of money. B) increases the supply of money. C) decreases the demand for money. D) increases the demand for money.
Refer to the accompanying graph. If this firm is a price taker, then when the price of each unit of output is $30, this firm's profit-maximizing level of output is ________.
A. 60 B. 30 C. 80 D. 100