Discount rate policy is most often
A. lowered when market rates rise.
B. used to actively control the money supply.
C. the Fed’s primary tool of monetary control.
D. passively changed by the Fed to follow market rates.
Answer: D
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Refer to the information provided in Table 8.4 below to answer the question(s) that follow. Table 8.4ProduceUsing TechniquesUnits of Variable KInputs L1 unit of outputA4 4?B2 6????2 units of outputA 7 6?B410????3 units of outputA 8 6?B 6 11Refer to Table 8.4. Assuming the price of capital (K) is $10 per unit and the price of labor (L) is $5 per unit, the lowest long-run total cost of producing one unit of output is
A. $8. B. $50. C. $60. D. $110.
According to Okun's law, an increase in the unemployment rate will cause ________ in the level of employment and ________ in the level of output.
A. a decrease; a decrease B. an increase; a decrease C. an increase; an increase D. a decrease; an increase
What is the principal-agent problem? What are three ways in which firms try to cope with it?
What will be an ideal response?
The reason externalities distort the allocation of resources is that
a. too few goods are usually produced. b. firms often go out of business because of the externality. c. a firm's private costs do not reflect the social cost of production. d. regulating externalities uses scarce resources.