Assume the Fed wants to lower the interest rate. How does the Fed lower the interest rate in the short run?
What will be an ideal response?
In order to lower the interest rate, the Fed increases the quantity of money. In the short run, when the quantity of money increases, the interest rate falls.
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Barriers to entering an industry ________.
A. encourage allocative efficiency B. are characteristic of a pure monopoly C. encourage productive efficiency D. apply only to pure monopolies
If a nation can produce a good or service at the lowest opportunity cost, then it
A) might export or import the good, depending on whether or not it has a comparative advantage in the production of the good. B) can sell the product at a lower price than other nations. C) will definitely import the good because it can beat other countries' prices. D) does not want to export the good because the low cost means it makes only a low profit. E) is best for the nation to not trade the good internationally.
Country A is labor abundant relative to country B if it has a larger labor force than B's
Indicate whether the statement is true or false
In the problem of double marginalization, the resulting price is ______than if the manufacturer were to sell directly to the consumer
a. Higher b. Lower c. The same d. None of the above