Another term for shortage is
A. excess demand.
B. equilibrium supply.
C. excess supply.
D. equilibrium demand.
Answer: A
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Explain how the value of marginal cost affects the values of average variable cost and average total cost and what this means for the relationship between the marginal cost curve and the average variable and total cost curves
What will be an ideal response?
According to economists of the rational expectations school, _____
a. the passive approach must be adopted because they believe the economy is too complex b. individual forecasts about policies can never be right c. anticipated monetary policy can affect the output level d. discretionary policy can stabilize the economy e. discretionary policy should be completely avoided
A price-taking firm will tend to expand its output as long as price exceeds average variable cost and: a. its marginal revenue is positive
b. its marginal revenue is greater than the market price. c. its marginal revenue is less than the market price. d. its marginal cost is less than the market price.
If there are no excess reserves in the banking system and the Fed lowers the required reserve ratio, it follows that banks will now have __________, which they can use to extend loans and create new __________
A) positive excess reserves; checkable deposits B) negative excess reserves; currency C) positive excess reserves; currency D) more vault cash; checkable deposits E) none of the above