When the Fed is targeting the money supply, it has complete control over the interest rate
a. True
b. False
Indicate whether the statement is true or false
False
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The table above shows techniques that can be used to produce 100 shirts. If the price of an hour of labor is $10 and the price of a unit of capital is $12, then the economically efficient technique is
A) W. B) X. C) Y. D) Z.
If the price of prime rib falls, the income effect due to the price change will cause
A) an increase in the quantity of prime rib supplied. B) an increase in the demand for prime rib. C) an increase in the demand for flank steak, a substitute for prime rib. D) an increase in the quantity of prime rib demanded.
Everything else held constant, if the sum of the required reserve ratio and the excess reserve ratio is less than one, a decrease in the currency-deposit ratio causes the M1 money multiplier to ________ and the money supply to ________
A) decrease; increase B) increase; increase C) decrease; decrease D) increase; decrease
Consider the following output-choice game for two firms:
Firm 2 - low Firm 2 - medium Firm 2 - high Firm 1 - low 150, 150 100, 160 75, 100 Firm 1 - medium 160, 100 110, 110 50, 75 Firm 1 - high 100, 75 75, 50 0, 0 What is the outcome of the game if both firms use maximin strategies? A) Both firms choose low output levels. B) Both firms choose medium output levels. C) There is no clear outcome under a maximin strategy for both firms. D) There are two possible maximin outcomes --- Firm 1 chooses medium and Firm 2 chooses low, or Firm 1 chooses low and Firm 2 chooses medium.