An increase in the money supply will lower the equilibrium rate of interest.
a. true
b. false
Ans: a. true
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The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
Which of the following is TRUE?
A) Child labor is most common in urban areas. B) Child labor is most common in the textile industry. C) Child labor is most common in production aimed at export markets. D) If child labor were stopped, families would have greater economic success. E) Agriculture is the main industry using child labor.
If the game in Scenario 13.17 were to be infinitely repeated, waging a price war might be a rational strategy
A) because there would be no short-term losses. B) because the short-term losses might be outweighed by long-term gains from preventing entry. C) if the potential entrant were irrational. D) if the monopolist had excess capacity. E) if there were no sunk costs to the potential entrant.
Which of the following is a possible result of adverse selection?
a. Only lemons remain in the market for used cars. b. A store manager shirks his responsibility because his supervisor is not present at all times. c. A car mechanic does not bother to properly fix the customers' cars when his work cannot be monitored. d. Many people selling their houses at very low prices expecting prices to decline further.