The discount rate is
A. the interest rate commercial banks charge their new customers.
B. the interest rate the Fed charges commercial banks for borrowing funds.
C. the interest rate commercial banks charge each other for borrowing funds.
D. the interest rate commercial banks charge their most creditworthy customers.
Answer: B
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A measure of the responsiveness of the demand for one good to the percentage change in the price of another good is
A) price elasticity of demand. B) price elasticity of supply. C) cross price elasticity of demand. D) income elasticity.
Payment by firms to landlords for commercial space is counted in aggregate accounting as:
A. rents. B. employee compensation. C. profits. D. interest.
The Fed has immense power and there are no limits to the extent to which it can effectively control the economy.
Answer the following statement true (T) or false (F)
Which of the following statements about an entrepreneur is true?
A) purchases other factors of production in the output market B) develops the vision for the firm and funds the producing unit C) sells his entrepreneurial services in the output market D) does not face personal risk