Assume the central bank decides to raise the discount rate. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?
a. Start the analysis in the real goods market with aggregate demand shifting to the left.
b. Start the analysis in the real goods market with aggregate demand shifting to the right.
c. Start the analysis in the real credit market with demand for real credit shifting to the left.
d. Start the analysis in the real credit market with demand for real credit shifting to the right.
e. Start the analysis in the real credit market with supply of real credit shifting to the left.
.E
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An oligopoly firm is similar to a monopolistically competitive firm in that
A) both operate in a market in which there are significant entry barriers. B) both firms face the prisoner's dilemma. C) both firms have market power. D) both firms are in industries characterized by interdependence of firms.
Today, the Federal Reserve System can contract the money supply by
(a) increasing the discount rate. (b) increasing reserve requirements. (c) selling U.S. Treasury and federal agency securities. (d) engaging in all of the above.
For a large firm that produces and sells automobiles, which of the following costs would be a variable cost?
a. the unemployment insurance premium that the firm pays to the state of Missouri that is calculated based on the number of worker-hours that the firm uses b. the cost of the steel that is used in producing automobiles c. the cost of the electricity of running the machines on the factory floor d. All of the above are correct.
Which of the following is a final good or service?
a) a haircut purchased by a father for his 12 year-old son b) fertilizer purchased by a farm supplier c) diesel fuel bought for a delivery truck d) Chevrolet windows purchased by a General Motors assembly plant