A newspaper headline reads: "Fed Raises Discount Rate for Third Time This Year." This headline indicates that the Federal Reserve is most likely trying to:
a. Stimulate the economy
b. Increase the money supply
c. Reduce the cost of credit
d. Reduce inflationary pressures in the economy
d. Reduce inflationary pressures in the economy
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Suppose a competitive market with adverse selection has settled into a pooling equilibrium where everyone is offered the same price. If firms then screen consumers, the outcome may and may not be more efficient.
Answer the following statement true (T) or false (F)
How is a monopolistically competitive firm similar to a perfectly competitive firm?
A) Both will observe entry into the industry if economic profit is positive. B) Both produce where average total cost equals marginal cost. C) Both make a positive economic profit in the long run. D) Both produce a homogeneous good.
Assume that for the second quarter of 2012, actual real GDP was $125.5 billion and potential real GDP was $142.7 billion. According to Okun's law, the cyclical unemployment rate during the second quarter of 2012 was
A) 5.7%. B) 6.0%. C) 6.9%. D) 7.4%.
The index that the U.S. government currently uses to determine whether a merger should be allowed is the
a. Herfindahl index b. Schumpeter index c. Dow Jones average index d. consumer price index e. four-firm concentration ratio