When the Fed reduces the discount rate, this sends a signal to banks that the Fed wants:
A. the money supply to contract.
B. to reduce the reserve requirement.
C. the money supply to expand.
D. the federal funds rate to increase.
Answer: C
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Mia wants to buy a book. The economic perspective suggests that Mia will buy the book if the
A. marginal cost of the book is greater than or equal to its marginal benefit. B. marginal cost of the book is affordable for her. C. marginal benefit of the book is greater than zero. D. marginal benefit of the book is greater than or equal to its marginal cost.
Refer to the above figure. From the standpoint of society, the optimal output is
A) Q1 B) Q2 C) Q3 D) Q4
Private ownership of most of the means of production is common to
A. capitalism and communism. B. capitalism and fascism. C. capitalism and socialism. D. fascism and communism.
In a sealed-bid Vickrey auction, the person who bids the:
A. highest gets the object of the bid at the price he or she bid. B. second highest bidder has the option to receive the good if he or she pays the price of the highest bidder. C. highest bidder gets the object but pays the price bid by the second highest bidder. D. second highest bidder gets the good and pays that price.