The monetary base is defined as
A) bank reserves plus currency held by the nonbank public.
B) bank reserves minus vault cash.
C) all deposits at the Fed.
D) deposits at the Fed plus vault cash.
A
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Which of the following is an example of the law of supply?
A) The price of gum has increased so producers are making more gum. B) The price of labor has increased and producers decrease supply. C) The amount of a good purchased increases when the price decreases. D) Producers provide less of a good when the price increases.
Exchange rates that are allowed to fluctuate in the open market in response to changes in supply and demand are known as
A) fixed exchange rates. B) gold exchange rates. C) flexible exchange rates. D) IMF exchange rates.
Which of the following statements is true of price fixing?
a. It represents a high level of competition in an industry. b. It is allowed only under the provisions of the Federal Trade Commission Act. c. It is, by definition, illegal, as there is no justification for it. d. It occurs only in perfectly competitive industries. e. It is legal in United States.
Entry of new firms will occur in a monopolistically competitive industry until
a. marginal cost equals zero b. marginal revenue equals zero c. marginal revenue equals marginal cost d. economic profit equals zero e. economic profit is negative