Most businesses probably claim they use cost-plus-markup pricing because
A) they are price takers.
B) they are maximizing net revenue.
C) they have no better way to explain their price-setting behavior.
D) they are responsible for long-run inflation.
C
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Assume that store brand cereal is an inferior good. If income rises, then the price of store brand cereal will ________ and the quantity sold of store brand cereal will ________.
A. fall; fall B. rise; rise C. rise; fall D. fall; rise
All of the following are macroeconomic effects of inflation except
A. Bracket creep. B. Uncertainty. C. Speculation. D. Lower taxes.
Which of the following monetary policy tools is more effective when the economy faces the interest rate zero-lower-bound problem?
A) open market operation B) discount policy C) required reserve ratio D) the Fed's liquidity provision
All of the following statements about secondary credit are true EXCEPT
A) they are temporary, short-term loans to satisfy seasonal requirements. B) the secondary credit interest rate is set above the primary credit rate. C) it is intended for banks not eligible for primary credit. D) borrowers of secondary credit are less financially healthy.