Screening is an action taken by an uninformed party to induce an informed party to reveal information
a. True
b. False
Indicate whether the statement is true or false
True
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
Suppose there is only one producer of frames, a necessary component in manufacturing computer monitors. Because of the threat of entry, this firm charges its customers a price equal to average cost. One reason that a producer of computer monitors may make rather than buy frames is
a. the frame supplier may be unreliable b. the total cost of the components of frames is the same as the price of frames purchased in the market c. the frame manufacturer has no incentive to make high-quality frames d. managers at the computer monitor firm place a high value on their time e. the frame manufacturer will soon go out of business because firms do not produce goods for the market that can be made in-house
If the Fed wants to raise interest rates, then it can use its open market operations to:
a. increase the money supply. b. decrease the money supply. c. increase money demand. d. decrease money demand.
Explain how an increase in the American demand for Chinese goods leads to a change in the Chinese yuan relative to the U.S. dollar