Refer to the diagram for the federal funds market. If the Fed wants the federal funds rate to fall from i f1 to i f2 , it can use open-market operations to:
A. increase the demand for federal funds.
B. increase the supply of federal funds.
C. decrease the supply of federal funds.
D. decrease commercial bank reserves.
B. increase the supply of federal funds.
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Suppose real GDP grows at 7 percent per year and the population grows at 2 percent per year. How many years will it take for real GDP and real GDP per person to double?
What will be an ideal response?
In the figure above, if the firm is regulated using an average cost pricing rule, the consumer surplus created is equal to the area of
A) ABG. B) BEFG. C) BCFG. D) BCE. E) None of the above because there is no consumer surplus created.
Refer to the table below. Recall that the bidders only know their own private value of the item and they do not know the other participants' private values. Further, assume each participant will submit bids using their optimal strategy. If the participants are bidding in a sealed-bid second-price auction, Bidder ________ wins the auction and pays ________.
The table above lists the independent private values of five participants in an auction. Each of the bidders only knows their own value and does not know the private values of the other participants.
A) #3; $9.5 million
B) #3; $10 million
C) #3; $9 million
D) #5; $9.5 million
Cost minimization suggests that two inputs should be employed to the point where
A. the marginal cost of each input is identical. B. the extra contribution to physical output of the inputs is identical. C. the marginal product per dollar spent on each input is identical. D. the marginal revenue product of each input is identical.