Refer to Figure 16-2. In the graph above, if the economy is at point A, an appropriate fiscal policy by Congress and the president would be to
A) execute an open market sale of government securities.
B) increase marginal income tax rates.
C) increase government transfer payments.
D) lower the discount rate of interest.
C
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The key characteristic of an oligopolistic market is:
A) production of a homogeneous product. B) mutual interdependence among firms in the market. C) the absence of market power by any one firm. D) ease of entry into, and exit out of, the market.
If the world price of steel is greater than the U.S. "no-trade" domestic equilibrium price of steel, the United States:
a. will not produce steel. b. will demand steel from the rest of the world. c. will supply steel to the rest of the world. d. will not trade in steel. e. will have a shortage of steel in the domestic market.
A recessionary gap results in an increase in _____
a. unemployment b. product prices c. the planned level of inventories d. input prices
An indirect effect of monetary policy is that as the money supply
A. decreases, interest rates fall, and borrowing and spending increase. B. decreases, interest rates rise, and borrowing and spending increase. C. increases, interest rates fall, and borrowing and spending increase. D. increases, interest rates rise, and borrowing and spending decrease.