The characteristic of ease of entry and exit ensures that perfectly competitive firms will be able to earn positive economic profits over the long run. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
In general, banks make profits by selling ________ liabilities and buying ________ assets. A) long-term; shorter-term B) short-term; longer-term C) illiquid; liquid D) risky; risk-free ANSWER B
Date: September 10th, 2020
In a closed economy firms sell goods and services to: A) households and foreigners. B) households and the government. C) just the government. D) none of the above. ANSWER B
Date: September 10th, 2020
In the money market, an excess supply of money will: A) increase the demand for bonds, increase bond prices, and decrease interest rates. B) increase the demand for bonds, decrease bond prices, and decrease interest rates. C) decrease the demand for bonds, increase bonds prices, and increase interest rates. D) decrease the demand for bonds, […]
Date: September 10th, 2020
When prices are measured in terms of fixed (base-year) prices they are called ________ prices. A) nominal B) real C) inflated D) aggregate ANSWER B
Date: September 10th, 2020
Which of the following would be classified as a short-run decision? A) A firm’s decision to decrease the amount of electricity used in day-to-day operations by encouraging employees to adopt conservation strategies, e.g., shut off lights when leaving a room. B) A restaurant’s decision to increase the number of patrons it can accommodate by adding […]
Date: September 10th, 2020
The Volcker Rule addresses the off-balance-sheet problem involving A) trading risks. B) selling loans. C) loan guarantees. D) interest rate risks. ANSWER A
Date: September 10th, 2020
Differences in ________ explain why interest rates on Treasury securities are not all the same. A) risk B) liquidity C) time to maturity D) tax characteristics ANSWER C
Date: September 10th, 2020
Perfectly competitive firms are referred to as price takers because the individual firm is so small relative to the market that its output decisions will not have any effect on the market-determined price. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
The measure of the aggregate price level that is most frequently reported in the media is the A) GDP deflator. B) producer price index. C) consumer price index. D) household price index. ANSWER C
Date: September 10th, 2020
