On what type of income do many economists believe that people base their consumption?
permanent
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If a technological breakthrough reduces input quantities needed to produce some item,
a. cost of production will be increased. b. the price of the product will rise. c. the price of the product will fall. d. quantity demanded of the product will fall.
Which of the following correctly describes marginal revenue product?
a. The change in total revenue divided by the change in output b. The change in total cost divided by the change in total revenue c. The change in total cost divided by the change in output d. The change in total revenue when an additional unit of a resource is hired
If the required reserve rate is ten percent and banks do not hold any excess reserves and there are no changes in currency holdings, a $1 million open market purchase by the Fed will result in what change in loans?
A. An increase of $10 million B. No change C. An increase of $1 million D. A decrease of $1 million
A significant bank crisis in one Eurozone country is a problem for the ECB because:
A) it will violate its money supply growth rule if it tries to provide liquidity to that country's banks. B) it has no mandate to be a lender of last resort to financial institutions in the Eurozone. C) it has no ability to affect the money supply in Eurozone countries. D) its consensus decision-making process may prompt too rapid a reaction to a crisis in one country.