An open-market purchase of T-bonds by the Fed causes the money supply to
A. fall and bond prices to fall.
B. rise and bond prices to fall.
C. rise and bond prices to rise.
D. fall and bond prices to rise.
Answer: C
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The equation representing the final demand approach to calculating GDP is
a. Y = C + I + X + IM. b. Y = C + I + G. c. Y = G + I + X ? IM. d. Y = C+ I + G + (X ? IM).
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2. B. P3 and Y1. C. P2 and Y2. D. P2 and Y3.
Consumer surplus is represented graphically under the demand curve and below the equilibrium price.
Answer the following statement true (T) or false (F)
The above figure shows the demand and cost curves for a firm in monopolistic competition in the long run. The firm maximizes its profit by
A) producing 4 units and charging a price of $15. B) producing 8 units and charging a price of $5. C) producing 16 units and charging a price of $10. D) None of the above answers is correct.