Monopolists reduce producer surplus.
Answer the following statement true (T) or false (F)
False
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If the Fed has announced that it plans on lowering the interest rate it will
A) engage in contractionary open market operations, thereby increasing the money supply. B) engage in contractionary open market operations, thereby decreasing the money supply. C) engage in expansionary open market operations, thereby decreasing the money supply. D) engage in expansionary open market operations, thereby increasing the money supply.
Suppose the economy has no income taxes or imports. The MPC equals 0.8. What does the expenditure model predict will be the change in real GDP if investment increases by $200 billion?
What will be an ideal response?
Starting from equilibrium and using the ISLM framework, a decrease in investment leads to
A) lower interest rates and higher income. B) higher interest rates and higher income. C) lower interest rates and lower income. D) higher interest rates and lower income.
Buyers and sellers receive signals from markets
A) by listening to the TV news programs. B) through the price system. C) from the gossip columns in the newspapers. D) from their friends and acquaintances.