Refer to the diagram, assuming that the firm represented is operating on curve TC 0 . If the user cost increases by $20 at the beginning of the year, the quantity extracted in the first year will:

When the Fed uses contractionary policy

A) it does not change the price level. B) the price level rises less than it would if the Fed did not pursue policy. C) it causes inflation. D) the price level rises higher than it would if the Fed did not pursue policy.

Which of the following would be expected if the tariff on foreign-produced automobiles were increased?

a. The domestic price of automobiles would fall. b. The supply of foreign automobiles to the domestic market would decline, causing auto prices to rise. c. The number of unemployed workers in the domestic automobile industry would rise. d. The demand for foreign-produced automobiles would increase, causing the price of automobiles to increase in other nations.