How does conventional monetary policy work in the short run?
A. Fed sets target FFR, open market operations, bank reserves and money supply changes, market FFR and other short run interest rates change, consumption changes, and AD changes
B. fed prints money, inflation increases, money loses value
Ans: A. Fed sets target FFR, open market operations, bank reserves and money supply changes, market FFR and other short run interest rates change, consumption changes, and AD changes
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Which of the following is an outcome of advertising for a monopolistically competitive firm?
a. Long-run average costs shift upward. b. The firm's demand curve keeps the same slope and shifts inward. c. Long-run average costs shift downward. d. The firm's demand curve becomes flatter and shifts inward.
Which of the following statements is NOT true of external benefits?
A) External benefits lead to an underallocation of resources to the production of the good that has the external benefit. B) External benefits lead to a price in the market that is too high. C) External benefits lead to too few of the goods that have the external benefit being produced. D) External benefits are a good thing for the allocation of resources because people are getting something at no cost.