One of the Fed's ultimate targets is:
A. the reserve requirement.
B. the Taylor rule.
C. stable prices.
D. the Fed funds rate.
Answer: C
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The following appeared in a Florida newspaper a week after a hurricane hit the state. "Floridians are relieved that the storm produced no fatalities but homeowners face weeks, if not months, of rebuilding. Matters are made worse by the soaring prices of plywood and other building materials that always follow in a hurricane's path. Complaints of profiteering and price gouging have not deterred firms from raising their prices by over 100 percent." Which of the following offers the best explanation for the price increases referred to in the article?
A) The hurricane caused an increase in the demand for building materials. B) The hurricane created an artificial shortage of building materials. C) There was a reduction in supply as firms shipped plywood and other materials to locations not affected by the storm. D) The hurricane reduced the number of suppliers of building materials.
Book publishers often use a cost-plus pricing strategy. One reason for this is
A) bookstores, not publishers, ultimately determine how many books will be produced. B) much of the cost of publishing textbooks is difficult to assign to any particular book. C) publishers do not want to incur the expense of determining the profit-maximizing strategy. They prefer cost-plus pricing because of its lower cost. D) most publishers do not hire economists who can determine the number of books they must sell to equate marginal cost and marginal revenue.
?For a perfectly competitive firm, ____.
a. ?price is less than marginal revenue at all output levels b. ?price equals marginal revenue at all output levels c. ?price exceeds marginal revenue at all output levels d. ?price is less than marginal revenue only at the profit-maximizing quantity e. ?price equals marginal revenue only at the profit-maximizing quantity
Other things equal, if a full-employment economy reallocated a substantial quantity of its resources to capital goods, we would expect:
A. present consumption to rise. B. future consumption to fall. C. a lower rate of growth of real GDP. D. labor productivity to rise.