If marginal benefit is greater than marginal cost, output is inefficiently high
Indicate whether the statement is true or false
FALSE
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To maximize joint profits, the members of a cartel have to determine the level of industry output by setting marginal revenue qual to the cartel's joint marginal costs of production
Indicate whether the statement is true or false
A corporation that operates in several countries, but produces all of its output in its domestic country, is called a(n)
a. sole proprietorship b. international partnership c. multinational corporation d. international corporation e. domestic corporation
Using the Taylor rule, if inflation is 1 percent, desired inflation is 2 percent, and output is 2 percentage points below potential, the Fed should target a federal funds rate of:
A. 1.5. B. 6.5. C. 4.5. D. 2.5.
The balance of payments constraint refers to the limits on:
A. exchange rate policy imposed by flexible exchange rates. B. currency convertibility observed in most developing countries. C. domestic macroeconomic policy, arising from a shortage of international reserves. D. macroeconomic policy resulting from IMF conditionality.