How much is the firm's ATC?
$85.20
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To eliminate a recessionary gap, what fiscal policy should the government pursue?
What will be an ideal response?
Bank regulation exists because public authorities are convinced that
a. the balance between public interest and safety does not affect profitability, and should be removed from the hands of managers. b. the balance between bank profitability and public interest cannot be handled with legislation, but can be handled with regulation. c. the balance between bank profitability and safety cannot be left to profit-maximizing managers. d. the balance between bank safety and public interest can best be obtained by reliance on the market.
In enforcing the legal system, the government in a market capitalist economy acts to:
A) enforce contracts. B) enforce property rights. C) discourage fraud. D) do all of the above.
When banks hold a large amount of excess reserves, which of the following tools would the Fed most likely use when it wants to increase the interest rate?
A. raising the discount rate B. raising the reserve requirement C. making an open market purchase D. raising the interest rate it pays to banks on their reserves