To decrease the money supply, the Fed may
A) buy government securities in the open market.
B) decrease the discount rate.
C) increase the required reserve ratio.
D) b and c
E) all of the above
C
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Two companies in a city provide insurance for cars—Company A and B. Company A pays 100% of the money required for repair in case of an accident, while Company B pays 70% of the total money required
A research agency has found that Company A's customers have more accidents. Which of the following explains this difference? A) Moral hazard B) Adverse selection C) The presence of positive externalities D) The presence of negative externalities
Total fixed cost
A) increases as output increases. B) does not change as output changes. C) decreases as output increases. D) initially decreases and then increases as output increases.
The products sold by monopolistically competitive firms
A) are differentiated. B) are homogeneous. C) can be either homogeneous or differentiated. D) are close substitutes of each other.
Which of the following would not be included in the government consumption expenditures and gross investment (G) category of GDP?
a. The payments made to Social Security recipients. b. The expenditures made to repair a highway. c. The spending for professors at state universities. d. The purchase of new china for White House functions.