When the Fed engages in an open market sale, the money supply ________ and the nominal interest rate ________.
A. increases; decreases
B. decreases; increases
C. increases; increases
D. decreases; decreases
Answer: B
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Suppose a monopoly can sell 10 units of output for $21. In order to sell 11 units of output, the price must fall to $20. What is the marginal revenue of the 11th unit?
A) $41 B) $20 C) $10 D) $1 E) $220
Everything else held constant, if disposable income increases by 200 and consumption expenditure increases by 150, the mpc is
A) 0. B) 0.15. C) 0.5. D) 0.75.
Lily wants to invest in the stock market. She notices that the share price for Great Flowers Inc. has been rising for weeks. She chooses to invest in Great Flowers Inc. because she assumes it will continue to rise purely because of the run it has been on. Lily suffers from:
A. the hot-hand fallacy. B. the gambler's fallacy. C. a present bias. D. the sunk cost fallacy.
An economy that is in equilibrium and operating below its full-employment capacity must be experiencing a(n)
a. inflationary period b. recessionary gap c. a surplus budget outcome d. market correction e. inflationary gap