Saving equals:
A. assets minus liabilities.
B. wealth minus assets.
C. current income minus spending on current needs.
D. current spending minus current income.
Answer: C
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Explain how the value of marginal cost affects the values of average variable cost and average total cost and what this means for the relationship between the marginal cost curve and the average variable and total cost curves
What will be an ideal response?
If a firm’s average cost is currently $100, and the marginal cost is $95, then the average cost is currently falling.
Answer the following statement true (T) or false (F)
In the federal funds market, _____
a. banks make loans to the Fed b. banks make short-term loans to other banks c. banks make long-term loans to other banks d. the Fed makes short-term loans to private borrowers e. the Fed makes long-term loans to commercial banks
Will the national debt have to be paid off (i.e., reduced to zero) in the future? a. No, it can continually be refinanced
b. Yes, if it is not paid off, the U.S. Treasury will have to file for bankruptcy. c. No, technically, it is not a contractual obligation of the federal government. d. Yes, but since most of the debt is held by Federal Reserve Bank, its re-payment would merely involve an accounting transaction between the Fed and the Treasury.