If the Fed raises its target for the federal fund rate, this indicates that
A) the Fed is pursuing an expansionary monetary policy.
B) the Fed is attempting to combat deflation.
C) the Fed is pursuing a contractionary monetary policy.
D) The Fed is concerned that the growth in aggregate demand is too slow to keep up with potential GDP.
Question 2
According to the marginal productivity theory of income
A) the income received by an individual who supplies labor services equals the incremental benefit generated to the firm by that individual's labor.
B) the average income received by an individual who supplies resources is influenced by the resources owner's marginal productivity.
C) the greater the quantity of resources owned by an individual, the greater his incentive to increase productivity and his income.
D) the income received by an individual who supplies labor services equals the profit generated to the firm by that individual's labor.
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