Refer to Figure 15-5. In the figure above, the movement from point A to point B in the money market would be caused by
A) a decrease in real GDP.
B) an open market sale of Treasury securities by the Federal Reserve.
C) an increase in the required reserve ratio by the Federal Reserve.
D) an increase in the price level.
D
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Professor I.M. Dismal returns to campus in the fall to find that the bookstore is charging 10% more for the new economics textbooks he ordered this year compared to last year
On the basis of this information, and using the economic way of thinking, what can Professor Dismal clearly conclude? A) The economy has experienced a 10% inflation over the year. B) The economy has experienced a 10% deflation over the year. C) The economy has experienced a disinflation over the year. D) The economy has experienced a steady price level over the year. E) The bookstore is charging 10% more for the new textbooks he ordered this year compared to last year.
Suppose the market price is $5, marginal cost is $4, and average total cost is $2. The perfectly competitive firm in that market is
A) earning $3 in economic profits per unit of output and is not maximizing profits. B) earning $2 in economic profits per unit of output and is maximizing profits. C) earning $1 in economic profits per unit of output and is not maximizing profits. D) none of the above: Insufficient information is given.