Positive supply shocks can have a tendency to ________ costs of production and ________ the inflation rate

An open market ________ by the Fed decreases interest rates and ________ investment

A) sale; decreases B) purchase; decreases C) purchase; increases D) sale; increases

Refer to Figure 5-1. The market equilibrium price is

A) $60. B) $50. C) $40. D) < $40.