Income is a flow measure.
Answer the following statement true (T) or false (F)
True
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If the Federal Reserve is currently paying 0.75% interest on bank reserves, but then increases that interest rate to 1%, banks may decide to hold ________ reserves, and the money supply may ________.
A. more; decrease B. more; increase C. fewer; decrease D. fewer; increase
If a potato farmer expands output, he finds that the increase in total revenue is less than the increase in total costs. This means that:
a. profit is being maximized. b. he should not have expanded output. c. he should produce even more output. d. the firm is wasting resources. e. the farmer should go out of business.
Increasing returns
A) causes marginal cost to remain constant. B) causes marginal cost to rise. C) causes marginal cost to fall. D) causes marginal product to rise but then fall.
Suppose the Euros per Canadian dollar exchange rate is 4 . The aggregate price level in France is 100, and the aggregate price level in Canada is 80 . The real exchange rate between the two countries is _____
a. 2.5 b. 3.2 c. 5 d. 2.4