The interest rate in the federal funds market:
a. is determined by the imposition of price controls imposed by the Fed.
b. rises when the quantity of funds demanded by banks seeking additional reserves exceeds the quantity supplied by banks with excess reserves.
c. will fall if the Fed sells bonds and, thereby, reduces the reserves available to banks.
d. is an interest rate that is largely unaffected by the policies of the Fed.
b
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Fixed costs are
A) a production expense that does not vary with output. B) a production expense that changes with the quantity of output produced. C) equal to total cost divided by the units of output produced. D) the amount by which a firm's cost changes if the firm produces one more unit of output.
Scarcity arises because
A) resources are finite and are inadequate to meet all human wants. B) production of goods and services is always slow. C) companies are slow to explore for new resources. D) a large number of people live in poverty.
Costs that tend to deter firms from changing their prices in response to changes in the market equilibrium price are referred to as
A) large menu costs. B) small menu costs. C) real menu costs. D) burden costs.
Which of the following is correct?
A. Economic development is more quantitative than economic growth. B. A country cannot achieve economic growth with a limited base of natural resources. C. Infrastructure is capital provided by the private sector. D. Economic development in LDCs is low because of many of them lack saving, infrastructure, and a political environment favorable to growth.