In 2008, the Fed _____ the discount rate in order to _____ the economy.
A. increased; stimulate
B. decreased; stimulate
C. increased; restrain
D. decreased; restrain
B. decreased; stimulate
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Use the following diagram to answer the next question.
The most likely cause of a shift of a production possibilities frontier of an economy AB to CD is
A. technological progress. B. allocative efficiency. C. a decrease in the price level. D. full employment of resources.
The AD curve slopes
A) downward due to the wealth and price effects. B) downward due to the wealth and substitution effects. C) upward due to the price and substitution effects. D) upward due to the wealth and substitution effects.
In a one-period economy, real consumption
A) is always less than disposable income. B) is typically greater than disposable income. C) is exactly equal to disposable income. D) can be greater than, less than, or equal to disposable income.
Figure 10-4
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Figure 10-4 shows the industry’s supply and demand curves in panel (1) and the cost curves of a firm in the industry in panel (2). At S3, the firm is
A. going to shut down. B. incurring losses. C. earning zero economic profits. D. earning economic profit greater than zero.