The difference between the interest rate on loans to households and firms and the rate on completely safe assets is known as ________
A) the discount rate
B) the FICO score
C) the credit spread
D) the prime rate
C
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
We typically think of labor as a variable cost, even in the very short run. However, some labor costs may be fixed. Which of the following items represents an example of a fixed labor cost?
A) An hourly employee B) A temporary worker who is paid by the hour C) A salaried manager who has a three-year employment contract D) none of the above
In order for barter to occur, traders must have a:
a. unit of account. b. coincidence of wants. c. medium of exchange. d. central banking facility.
Inflation is an increase in the overall price level in the economy
a. True b. False Indicate whether the statement is true or false