If the Fed simultaneously raises the discount rate and the reserve requirement, the money supply will:
A. expand.
B. contract.
C. remain unchanged.
D. take on a value that cannot be determined from the information given.
Answer: B
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An increase in the number of workers hired by a firm could result from
A) a decrease in the marginal product of labor. B) a decrease in the marginal revenue product of labor. C) an increase in the real wage. D) a decrease in the real wage.
Carson Manufacturing uses sharp but temporary price cuts to discourage new competition in the widget market. Which barrier to entry is used by Carson Manufacturing?
a. Predatory pricing b. Price skimming c. Economies of scale d. Deregulation
The nominal tax rate is
A. Taxes paid divided by total economic income. B. Equal to the marginal tax rate. C. Taxes paid divided by taxable income. D. Lower than the effective tax rate.
If a monopolistically competitive firm is making profits
A. it can be assured of high profits for all time to come. B. the entrance of new firms decreases the demand facing the firm, thereby reducing profits. C. the entrance of new firms increases the demand facing the firm, thereby reducing profits. D. the entrance of new firms increases costs, thereby reducing profits.