In the early 2000s, Fannie Mae and Freddie Mac came under political pressure to buy nontraditional loans
Indicate whether the statement is true or false
True
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Which of the following statements best describes the price, output, and profit conditions of monopoly?
a. Price will equal marginal cost at the profit-maximizing level of output and profits will be positive in the long run. b. Price will always equal average variable cost in the short-run and either profits or losses may result in the long run. c. In the long run, positive economic profit will be eliminated. d. None of these.
One of the major drawbacks of crowding out is that it: a. decreases the rates of interest in the economy
b. increases the rates of interest in the economy. c. decreases the short-run growth rate of the economy. d. prohibits foreign investments in an economy.
Initially, a pharmacy with a volume of 35,000 had fixed costs of $200,000 and variable costs of $140,000. After remodeling, its fixed costs fell to $100,000, even though its volume and variable costs were unchanged. As a result,
A. its infra-marginal costs will be lower. B. its incremental costs will be lower. C. its average costs will be lower. D. All of the above
When the Fed sells 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. decreases the amount of excess reserves that banks hold, discouraging them from making loans to the general public. D. increases the amount of excess reserves that banks hold, encouraging them to make loans to the general public.