The rate of product transformation refers to
a. how a consumer can trade one good for another while still maximizing his or her utility.
b. how a firm can substitute one input for another and still maintain the same production level.
c. how production of one good can be substituted for another while still using a fixed supply of inputs efficiently.
d. how quickly a firm can produce a final good while starting with only natural resources.
c
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Use the following graph for the federal funds market to answer the next question.
A $25 billion increase in reserves will change the interest rate to ________.
A. 3.5% B. 4.0% C. 3.0% D. Undeterminable with the provided information.
In the long run, a decrease in money supply, with the velocity of money stable or not decreasing, results in inflation
Indicate whether the statement is true or false
When the Fed buys government securities, it:
A. lowers the cost of borrowing from the Fed, encouraging banks to make loans to the general public. B. raises the cost of borrowing from the Fed, discouraging banks from making loans to the general public. C. increases the amount of excess reserves that banks hold, encouraging them to make loans to the general public. D. increases the amount of excess reserves that banks hold, discouraging them from making loans to the general public.
College graduates are paid more, on average, partly because the act of finishing college signals that they are more likely to be a good employee.
a. true b. false