The interest rate that commercial banks charge each other for very short-term loans is called the:
A. federal funds rate.
B. prime rate.
C. bank loan rate.
D. Federal Reserve discount rate.
Answer: A
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Suppose that a perfectly competitive market is in equilibrium. Then,
a. the equilibrium quantity provides the maximum possible benefit to buyers b. the equilibrium quantity provides the maximum possible benefit to buyers and sellers combined c. total (producer + consumer) surplus is equal to price x quantity. d. an additional unit, if produced, would produce a benefit that exceeds its cost of production e. an additional unit could be produced at a cost to some producer that is less than the benefit to some consumer
In general, if a consumer good is produced domestically and consumed domestically, an increase in its price will have which of the following effects?
a. The consumer price index will increase relatively more than will the GDP deflator. b. The consumer price index and the GDP deflator will increase by the same amount. c. The consumer price index will increase relatively less than will the GDP deflator. d. One cannot generalize about the increase in the consumer price index relative to the increase in the GDP deflator.
The prices paid to a productive resource usually perform an incentive function except with what resource?
A. Land B. Labor C. Capital D. Entrepreneurial ability
Refer to Figure 2-13. What is the opportunity cost of producing 1 ton of pineapples in Costa Rica?
A) 3/8 of a ton of coconuts B) 2/3 of a ton of coconuts C) 1 1/2 tons of coconuts D) 100 tons of coconuts