Which of the following statements is correct? A) In the short run, if a firm chooses to produce no output (i.e., shut down) its total costs of production will equal its total fixed costs. B) If a firm decides to shut down, its short-run total costs will equal 0. C) As a firm increases output […]
Date: September 10th, 2020
A particularly attractive feature of the ________ is that it tells you what the market is predicting about future short-term interest rates by just looking at the slope of the yield curve. A) segmented markets theory B) expectations theory C) liquidity premium theory D) separable markets theory ANSWER C
Date: September 10th, 2020
A credit market instrument that requires the borrower to make the same payment every period until the maturity date is known as a A) simple loan. B) fixed-payment loan. C) coupon bond. D) discount bond. ANSWER B
Date: September 10th, 2020
Explain why, when all adjustment have taken place, the perfectly competitive firm will operate at the minimum of its short-run and long-run average total cost curves and earn zero economic profit. What will be an ideal response? ANSWER Because perfectly competitive firms are price takers, the only means they have to increase profits in […]
Date: September 10th, 2020
The majority of members of the Federal Open Market Committee are A) Federal Reserve Bank presidents. B) members of the Federal Advisory Council. C) presidents of member banks. D) the seven members of the Board of Governors. ANSWER D
Date: September 10th, 2020
The ________ of the term structure states the following: the interest rate on a long-term bond will equal an average of short-term interest rates expected to occur over the life of the long-term bond plus a term premium that responds to supply and demand conditions for that bond. A) segmented markets theory B) expectations theory […]
Date: September 10th, 2020
Why is the money multiplier smaller than the simple deposit multiplier? What will be an ideal response? ANSWER In the case of the money multiplier, individuals may hold some of their assets in cash rather than depositing them in a checking account and banks may hold excess reserves. The simple deposit multiplier assumes all […]
Date: September 10th, 2020
In 2001-2002, the fast food industry underwent tremendous growth. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
When an investment bank ________ securities, it guarantees a price for a corporation’s securities and then sells them to the public. A) underwrites B) undertakes C) overwrites D) overtakes ANSWER A
Date: September 10th, 2020
The level of aggregate output and income where there is a balance between spending and production decisions and where the economy moves toward is called: A) disequilibrium level of output and income. B) equilibrium level of output and income. C) disequilibrium level of employment. D) none of the above. ANSWER B
Date: September 10th, 2020
