The central bank has the ability to create money; this means it:
A. can control the availability of money but not the availability of credit in the economy.
B. can make loans only when other institutions can.
C. has an objective to maximize its profit.
D. can impact the rate of inflation.
Answer: D
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If the regulatory agency sets a price where AR = AC for a natural monopoly, output will be
A) equal to the competitive level. B) equal to the monopoly profit maximizing level. C) greater than the monopoly profit maximizing level and less than the competitive level. D) greater than the competitive level.
Which auction format generates the most revenue for the seller?
a. First price. b. Second price. c. They generate the same expected revenue. d. Depends on the environment.
What role do non-monetary considerations play in physical capital investment decisions as opposed to human capital investment decisions?
a. they play a minor to nonexistent role in both. b. they play an equally important role in both. c. they are probably more important in physical capital investment decisions. d. they are probably more important in human capital investment decisions.
Frieda enjoys cooking and baking. Her utility function is U(C, B) = 6C + 3B, where C is the number of hours she spends cooking and B is the hours she spends baking. What is Frieda's MRS of cooking with baking?
A. 1/6 B. 2 C. 6 D. It cannot be determined from the given information.