Full-employment output is also called:
A. zero-unemployment output.
B. equilibrium output.
C. potential output.
D. zero-savings output.
C. potential output.
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The existence of counterparty risk
A) has no effect on the contracting parties. B) is disallowed under current government regulations. C) results in information costs for buyers and sellers when analyzing the potential creditworthiness of potential trading partners. D) reduces the risk introduced by forward contracts.
An implicit cost is
a. any cost a firm cannot avoid in the short run b. any expenditure a firm makes c. an opportunity cost d. accurately measured in accounting statements e. ignored by economists
One way the government can encourage economic growth is to:
A. protect property rights. B. enforce contracts. C. ensure legal agreements will be upheld. D. All of these actions will encourage economic growth.
If the Federal Reserve decides to increase the money supply:
a) the federal funds rate will rise. b) the federal funds rate will fall. c) the federal funds rate will be unaffected. d) deflation will occur.