Profit-maximizing firms enter a competitive market when existing firms in that market have
a. total revenues that exceed fixed costs.
b. total revenues that exceed total variable costs.
c. average total costs that exceed average revenue.
d. average total costs less than market price.
d
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If the Fed engages in quantitative easing, it has likely
A) started paying interest on required reserves. B) increased the federal funds rate by selling private securities. C) increased the discount rate to prevent inflation. D) decreased the discount rate by selling its own securities. E) decreased the federal funds rate to almost zero by buying large sums of securities.
By the year 2015, health care spending on Medicare, Medicaid, and other U.S. government programs as a percentage of GDP had reached a level of
A) 2.2 percent. B) 6 percent. C) 17.5 percent. D) 21.5 percent.
Insurers try to minimize moral hazard by
a. only selling policies to individuals with high ethical standards. b. requiring advance payments of premiums. c. charging higher premiums to individuals than to groups. d. charging deductibles and coinsurance. e. refusing to sell insurance to individuals with chronic illnesses.
In Figure 15.4, a decrease in the money supply from $135 billion to $100 billion will cause all of the following except
A. A decrease in aggregate demand. B. A decrease in the price level. C. An increase in borrowing. D. A $10 billion decrease in investment.