The Fed can increase the money supply by conducting open market sales of U.S. Treasury Bonds, or by raising the required reserve ratio

A shoe manufacturer is producing at a point where its marginal costs are $5 and its fixed costs are $5000 . At the current price of $10 it is producing 500 pairs. If the demand goes down, such that they can now only charge $8 per pair, should they continue production in the short run?

a. No because price has fallen b. Yes because price is still higher than marginal costs c. No because price is lower than average cost d. Yes because price is higher than marginal costs

Why does the numerical value of the multiplier fall when an income tax is added to the income-expenditure model?