When the Fed ________, the U.S. foreign exchange rate falls
A) increases the size of the multiplier
B) raises the interest rate
C) raises taxes on interest income
D) buys government securities
E) sells government securities
D
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Which of the following statements is true?
A) Knowledge of economics complicates decision making. B) Economics is more of a theoretical subject with limited applications in the real world. C) Testing with data is essential to develop a good theory. D) Cost-benefit analysis can be applied only to limited economic decisions.
If productive efficiency characterizes a market
A) the marginal cost of production is minimized. B) the output is being produced at the lowest possible cost. C) firms use the best technology available to produce the good. D) firms produce the goods that consumers desire most.