Explain the difference between the short run and the long run as it relates to the firm’s production function. Why is this distinction important to a firm’s manager? What will be an ideal response? ANSWER In the short run, the amount of at least one input employed by the firm, usually capital, is fixed […]
Date: September 10th, 2020
Everything else held constant, in the market for reserves, decreases in the interest rate paid on excess reserves affect the federal funds rate A) when the funds rate is below the interest rate paid on excess reserves. B) when the funds rate equals the interest rate paid on excess reserves. C) when the funds rate […]
Date: September 10th, 2020
________ imposes a conceptual structure and inherent discipline on policy makers, but without eliminating all flexibility. A) Constrained discretion B) A policy rule C) A discretionary policy D) The Taylor rule ANSWER A
Date: September 10th, 2020
The Clayton Act: A) was passed in 1985 over the objections of then President Reagan. B) outlaws racial discrimination in the practice of business. C) outlaws the ownership of stock by the U.S. government unless it is in public enterprises. D) outlaws price discrimination unless based on cost differences. ANSWER D
Date: September 10th, 2020
A discount bond selling for $15,000 with a face value of $20,000 in one year has a yield to maturity of A) 3 percent. B) 20 percent. C) 25 percent. D) 33.3 percent. ANSWER D
Date: September 10th, 2020
The total quantity of an economy’s final goods and services demanded at different inflation rates is A) the aggregate supply curve. B) the aggregate demand curve. C) the Phillips curve. D) the aggregate expenditure function. ANSWER B
Date: September 10th, 2020
An increase in the amount of resources would shift the long-run aggregate supply curve: A) rightward. B) leftward. C) no shift. D) none of the above. ANSWER A
Date: September 10th, 2020
If interest rates rise by 5 percentage points, say from 10 to 15%, bank profits (measured using gap analysis) will A) decline by $0.5 million. B) decline by $1.5 million. C) decline by $2.5 million. D) increase by $2.0 million. ANSWER A
Date: September 10th, 2020
The monetary base consists of A) currency in circulation and Federal Reserve notes. B) currency in circulation and the U.S. Treasury’s monetary liabilities. C) currency in circulation and reserves. D) reserves and Federal Reserve Notes. ANSWER C
Date: September 10th, 2020
What are some of the issues associated with the consumer price index? What will be an ideal response? ANSWER The fixed market basket procedure creates a number of problems in the CPI over time. One problem is substitution bias. Consumers will demand various quantities of goods and services in response to changes in their […]
Date: September 10th, 2020
