The reason that the Fed does not actively use discount rate policy to control the money supply is because the Fed
a. acts when a majority of member banks agree on policy and the banks rarely agree.
b. earns interest on discounting and cannot afford to lose the revenue.
c. does not know how banks will respond to discount rate changes.
d. has been directed by Congress to set the discount rate at a permanent level.
c
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The government of Lithasia ran a budget deficit of $60,000 in 2014. If the tax revenue of the Lithasian government in 2014 was $320,000,000, how much did the government spend in that year?
A) $319,940,000 B) $1,060,000 C) $320,060,000 D) $49,000,000
Comparative advantage is illustrated by the slopes of production possibilities frontiers
a. True b. False Indicate whether the statement is true or false
Figure 8.2 shows demand and costs for a monopolistically competitive firm. In the long run we expect:
A. more firms to enter the market. B. the firm's demand curve to shift to the right. C. the price of the good to increase. D. the average cost of production to decrease.
Suppose a monopolist's costs and revenues are as follows: ATC = $45.00; MC = $35.00; MR = $35.00; P = $45.00. The firm should
A) increase output and decrease price. B) decrease output and increase price. C) not change output or price. D) shut down.