The Federal Reserve can increase the money supply by:
A. reducing reserve requirements.
B. increasing the discount rate.
C. conducting open market sales.
D. eliminating deposit insurance.
Answer: A
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If the short-run average variable cost of production for a firm is decreasing, then it follows that
A. average variable cost must be greater than marginal cost. B. marginal cost must be decreasing. C. average variable cost must be greater than average fixed cost. D. average fixed cost must be constant.
The view that individuals weigh all available evidence when they formulate their expectations about economic events (including information concerning the probable effects of current and future economic policy) is called
a. the adaptive expectations hypothesis. b. the permanent income hypothesis. c. the rational expectations hypothesis. d. the Phillips curve.
Why is a monopsony a negative situation for a worker?
a. Wages are lower than in a competitive labor market. b. Their workplace is not in a convenient location. c. Increased hiring causes workplace overcrowding. d. They have better options for employment nearby.
The definition of gross domestic product is
A. the total value of all sales in the economy. B. the total value of production in the domestic economy plus the production of domestic firms in foreign countries. C. the total value of all sales of final and intermediate goods in the domestic economy. D. the total of the money values of all final goods and services produced in the domestic economy within a specific time period.