Fixed costs do not vary as output changes.
Answer the following statement true (T) or false (F)
True
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The Federal Reserve Act:
a. established a system which allowed for better regulation of financial intermediaries. b. allowed only nationally-chartered banks to become members of the Federal Reserve system. c. allowed the Fed District Banks to offer commercial loans to private businesses at reduced interest rates. d. required that all Fed District Bank directors be associated with the commercial banking industry. e. all of the above.
The RAND Health Insurance Study
a. examined cross-section data to estimate the demand function for medical care. b. was the most extensive controlled experiment in health insurance ever conducted in the United States. c. like most economic studies, was based on individual decisions in voluntarily choosing health insurance coverage. d. was flawed due to severe self-selection bias. e. was set up to study medical outcomes when individuals were free to choose the type of health coverage they desired.
If Billy Bob's National Bank of Slingblade confronts a 10 percent reserve requirement and has excess reserves of $20,000, what is the maximum amount of additional loans that the bank can extend?
a. $2,000 b. $18,000 c. $20,000 d. $200,000
When the United States imposed a tariff on imported shrimp, a Vietnamese official said: "If the tariffs are imposed, that will mean fewer shrimp for the U.S. market and higher prices for consumers. So the U.S. government position hurts its own people. That's irrational." The imposition of tariffs by the United States in this case illustrates:
A. the good/bad paradox that what is good economics is always bad politics and vice versa. B. that U.S. consumers are either irrational or altruistic because they are willing to pay higher prices to help the U.S. shrimp industry. C. what the text calls the general rule of political economy, which states that often small interest groups lobby better than large groups. D. that the U.S. government, like all governments, is sometimes irrational.