Monetary policy:
a) Shifts the aggregate supply curve.
b) Is controlled by Congress.
c) Is controlled by the Federal Reserve.
d) Refers to the use of government spending.
Ans: c) Is controlled by the Federal Reserve.
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An increase in the marginal tax rate, with the average tax rate held constant, will
A) increase the amount of labor supplied at any real wage. B) not affect the amount of labor supplied at any real wage. C) decrease the amount of labor supplied at any real wage. D) increase the amount of labor supplied at any real wage if the average tax rate is above the marginal tax rate, but decrease the amount of labor supplied at any real wage if the average tax rate is below the marginal tax rate.
Which of the following statements demonstrates an understanding of the importance of sunk costs for decision making?
I. "Even though I hate my MBA classes, I can't quit because I've spent so much money on tuition." II. "To break into the market for soap our firm needs to spend $10M on creating an image that is unique to our new product. When deciding whether to develop the new soap, we need to take this marketing cost into account." A) I only B) II only C) Both I and II D) Neither I nor II
Financial intermediaries are institutions that
A) produce money for the federal government. B) regulate the activities of stock and bond markets. C) act as middlemen in the process of directing funds from savers to investors. D) oversee the activities of government institutions such as the Federal Reserve.
Use the answer you found when adding market demand curves vertically in Question 18 above to find the market equilibrium quantity if the market supply is constant at 4 units.
What will be an ideal response?