After the 2001 recession, the Fed changed interest rates to ______.
a. slow inflation
b. discourage deflation
c. slow growth
d. discourage lending
b. discourage deflation
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When the actual inflation rate turns out to be greater than the expected inflation rate, who gains—the borrower or the lender—and who loses? Explain why
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Why do firms in a monopolistically competitive industry advertise?
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A firm's marginal product of capital is twice its marginal product of labor; the price of labor is $6, and the price of capital is $3. Is the firm minimizing cost? If not, how can it reduce its cost? Explain.
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Which of the following is NOT a characteristic of the demand curve faced by a firm in a monopolistically competitive market?
A. The firm will produce where the demand curve is inelastic. B. The slope of the demand curve is negative. C. The firm will produce where the demand curve is elastic. D. The demand curve is downward sloping.