Monetary policy is
A. minting coins and printing Federal Reserve notes.
B. manipulating interest rates, credit conditions, and the money supply.
C. manipulating government expenditures and tax revenues.
D. regulating the United States dollar price of gold.
B. manipulating interest rates, credit conditions, and the money supply.
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The theory of PPP suggests that if one country's price level rises relative to another's, its currency should
A) depreciate in the long run. B) appreciate in the long run. C) depreciate in the short run. D) appreciate in the short run.
Answer the following questions true (T) or false (F)
1. Consumers in a monopolistically competitive market do not receive any consumer surplus because the price paid for the product exceeds the marginal cost of production. 2. Assume that price exceeds average variable cost over the relevant range of demand. If a monopolistically competitive firm is producing at an output where marginal revenue is $111.11 and marginal cost is $118, then to maximize profits the firm should increase its output. 3. A monopolistically competitive firm should lower its price if its marginal revenue exceeds its marginal cost.