One reason for the short-run aggregate supply curve (SRAS) is:
a. fixed-wage contracts.
b. perfect knowledge of workers.
c. the upward-sloping production function.
d. a fixed CPI market basket.
a
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The marginal rate of substitution is equal to the ________
A) marginal cost of each good B) magnitude of the slope of the indifference curve C) inverse of the slope of the budget line D) relative price of the two goods
If the economy were encountering a severe recession, proper monetary and fiscal policies would call for:
A. selling government securities, raising the reserve ratio, lowering the discount rate, increasing interest paid on reserves held at Fed banks, and a budgetary surplus. B. buying government securities, reducing the reserve ratio, reducing the discount rate, reducing interest paid on reserves held at Fed banks, and a budgetary deficit. C. buying government securities, raising the reserve ratio, raising the discount rate, reducing interest paid on reserves held at Fed banks, and a budgetary surplus. D. buying government securities, reducing the reserve ratio, raising the discount rate, reducing interest paid on reserves held at Fed banks, and a budgetary deficit.