A reduction in the number of farms in the United States has caused food production to fall
Indicate whether the statement is true or false
F
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Open market operations involve
A) the buying and selling of existing corporate bonds. B) the buying and selling of existing corporate stocks. C) the buying and selling of existing federal government bonds. D) the buying and selling of Federal Reserve bonds.
If a 10 percent decrease in the price of product A brings about a 3 percent increase in the sales of product B, then:
a. products A and B are complementary. b. the cross elasticity of demand between these two products is positive. c. products A and B are substitutes. d. the demand for these products is inelastic. e. the total revenue earned from product A will decrease.
Regardless of whether or not screening or signaling occurs in markets with adverse selection, the equilibrium will always be less efficient than an equilibrium in the same competitive market if there were no asymmetric information.
Answer the following statement true (T) or false (F)
Suppose that inflation is at the target rate and output has fallen substantially below potential output. A central bank with a primary objective of price stability should ________
A) do nothing, because inflation cannot rise when unemployment is high B) ease monetary policy, to avoid a decrease in the inflation rate C) do nothing, because stabilizing economic activity is not a primary objective D) ease monetary policy, because avoiding high unemployment is more important than avoiding high inflation E) none of the above