Implicit costs involve an exchange of money

Assuming all else equal, if a firm decides to pay more dividends and lowers the amount of retained earnings it holds, it will cause:

A) an upward movement along the current credit supply curve of the firm. B) a downward movement along the current credit supply curve of the firm. C) the current credit supply curve of the firm to shift to the left. D) the current credit supply curve of the firm to shift to the right.

Refer to Figure 26-14. In the figure above, suppose the economy in Year 1 is at point A and is expected in Year 2 to be at point B. Which of the following policies could the Federal Reserve use to move the economy to point C?

A) sell Treasury bills B) decrease income taxes C) buy Treasury bills D) increase the required-reserve ratio