Under perfect competition, the individual firm's economic profit is 
Figure 42.2
A. zero.
B. the larger of the dashed-line boxes.
C. between the size of the two dashed-line boxes.
D. the smaller of the dashed-line boxes.
Answer: A
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If the reserve ratio is 10 percent, the money multiplier is equal to 10
Indicate whether the statement is true or false
The discount rate is the interest rate
A) paid on time deposits. B) paid on funds banks borrow from other banks. C) paid on funds that depository institutions borrow from the Federal Reserve. D) that banks charge their "best" customers.
If the U.S. government retires the national debt, then
A) a shift in the demand of loanable funds will cause interest rates to rise. B) a shift in the demand of loanable funds will cause interest rates to fall. C) a shift in the supply for loanable funds will cause interest rates to rise. D) a shift in the supply for loanable funds will cause interest rates to fall. E) there will be an excess supply for loanable funds.
When an oligopoly cuts its price to try and attract customers from rivals, it could lead to a price war
a. True b. False Indicate whether the statement is true or false