If the Fed _____________________, the money supply will ultimately __________
A) raises the discount rate relative to the federal funds rate; decrease
B) lowers the discount rate relative to the federal funds rate; increase
C) lowers the discount rate relative to the federal funds rate; decrease
D) raises the discount rate relative to the federal funds rate; increase
E) a and b
E
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Of the following, the best example of private information is when
A) Michael knows the price of a gallon of milk at the minimart but Michelle doesn't know. B) you know some of your used car's defects but a potential buyer cannot find out about them until after buying. C) you don't know the quality of a used car and must hire a trained mechanic who tells you all its defects. D) you pay the owner of a used car a little extra and she lets you know all of the car's defects.
When majority rule voting is used to determine whether to purchase a public good,
A) the efficient outcome is assured. B) the median voter gets her way. C) the sum of the marginal benefits must equal marginal cost. D) the marginal benefit of the good to the median voter equals the good's marginal cost.