When a member bank borrows reserves from the Fed,
A) it pays an interest rate called the discount rate.
B) it pays no interest rate but is required to repay the loan within the stipulated period.
C) it pays an interest rate equivalent to the coupon rate on long-term government bonds.
D) it pays an interest rate equal to the federal funds in the reserves market.
Ans: A) it pays an interest rate called the discount rate.
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A monopoly is
A) a price taker. B) able to ignore the demand for its product when setting its price. C) able to set the price for its product. D) able to earn only a normal profit in the long run. E) a firm with no marginal revenue curve.
Along a backward-bending labor supply curve, the
a. income effect always dominates the substitution effect b. substitution effect always dominates the income effect c. substitution effect is always equal to the income effect d. substitution effect dominates the income effect at high wage rates e. substitution effect dominates the income effect at low wage rates
If a firm experiences diminishing marginal productivity of labor, the total-cost curve gets flatter as the quantity of output increases
a. true b. false
If the cross-price elasticity of demand between lettuce and salad dressing is negative, then when the price of lettuce rises, the demand for salad dressing will ________.
A. increase B. become more inelastic C. decrease D. remain the same