To deal with the financial crisis of 2007-2009, the Fed extended its lender of last resort function to include institutions other than banks
Indicate whether the statement is true or false
True
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When total output, income, employment, and trade decline for 6 to 12 months, the economy is in what part of the business cycle?
What will be an ideal response?
Suppose there is a rise in the price level, but no change in the money wage rate. As a result, the quantity of labor demanded
A) increases. B) decreases. C) does not change because there is no change in the real wage rate. D) decreases only if the money wage rate also decreases.
Changes in relative prices create substitution effects
a. True b. False Indicate whether the statement is true or false
A firm in monopolistically competitive market is producing 30 units of output. At this level of production, the firm charges $50 per unit. Its marginal cost is $24 and marginal revenue is $24, and average cost is $20 per unit. Given this information, this firm should
A. maintain its current output, since it is maximizing profits. B. decrease output to increase profits. C. increase output to increase profits. D. shut down.