The Fed is often considered the bankers' bank because it
a. demands much more currency than it has available
b. no longer has a monopoly on printing paper currency
c. lowers the discount rate in order to restrict the money supply
d. holds banks' reserves, provides banks with currency and loans, and clears their checks
e. refuses to use its power of open market operations when a quorum of state-chartered bankers petitions it
D
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In a graph of a typical firm's AFC, ATC, and AVC curves, the
A) AVC curve lies above the ATC curve. B) ATC curve lies below the AFC curve. C) distance between the ATC curve and the AVC curve equals the AFC. D) distance between the AVC curve and the AFC curve equals the ATC. E) AVC curve crosses the MC curve at the point where the MC is at its minimum.
If business losses are the result of uncertainty in the real world, then
A) business profits are too. B) profits must equal losses in the short run. C) profits must equal losses in the long run. D) losses could be eliminated if we could eliminate uncertainty in the real world, but profits will still remain.
In the above figure, at the point where AD equals SAS
A) real GDP exceeds potential GDP. B) potential GDP exceeds real GDP. C) the economy is in a recession. D) the unemployment rate is zero.
Figure 8-1
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Based on the scatter diagram in Figure 8-1, if real disposable income is $800 billion, the consumption spending would be approximately
A. $800 billion. B. $650 billion. C. $540 billion. D. $420 billion.