When the Fed changes money supply by selling government securities, the interest rate will
A) fall unless the LM curve is horizontal.
B) fall unless the IS curve is vertical.
C) rise if the LM curve is vertical or upward sloping.
D) remain constant if the LM curve is vertical.
C
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In the table above, Jack's opportunity cost for 1 pound of food is ________ and his opportunity cost for 1 pound of clothing is ________
A) 1 pound of clothing; 4 pounds of food B) 1/2 of a pound of clothing; 2 pounds of food C) 1/3 of a pound of clothing; 3 pounds of food D) 2 pounds of clothing; 2 pounds of food E) 1 pound of food; 1 pound of clothing
Which of the following is TRUE with respect to specialization?
A) Adam Smith in The Wealth of Nations referred to specialization and division of labor. B) With a given set of resources, specialization results in higher output. C) Individuals and nations specialize in their areas of comparative advantage in order to reap the gains of specialization. D) All of the above are correct.