If there is an autonomous decrease in spending (a leftward shift in the aggregate demand curve) and the Fed wishes to hold real income constant, then the Fed would:
A) decrease the money supply yielding a leftward shift in the aggregate demand curve.
B) increase the money supply yielding a rightward shift in the aggregate demand curve.
C) hold the money supply constant.
D) none of the above.
B
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Suppose a country operates on its production possibility frontier when it produces 1000 books and 1000 tables. The combination of ________ reflects ________
A) 500 books and 1000 tables; an inefficient but attainable point. B) 500 books and 500 tables; an attainable and efficient point. C) 1000 books and 1500 tables; a free lunch. D) 1000 books and 1000 tables; a free lunch. E) 1000 books and 500 tables; an efficient point.
Shoe-a-holic Cathy started her own line of custom made, hand embellished wedding shoes. She opened up her own shop paid $2500 in fixed licensing fee. She used about $3000 in raw materials and made $3500 . At the end of the first month, Carly, her sister
looked at her financials and told her that she was losing money and should shut down. Cathy is heartbroken. As an economics guru, what would you advise her to do?