The Fed responds to money demand shocks by
a. changing the velocity of money
b. changing the money supply
c. following the money creation rules responsible for its success in the past two decades
d. increasing the required reserve ratio
e. changing its definition of the natural rate of unemployment
B
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Marginal cost is calculated as
A) total cost divided by output. B) the increase in total cost divided by the increase in output. C) the increase in total cost divided by the increase in labor, given the amount of capital. D) total cost minus total fixed cost.
Household production is more likely to occur when
a. it requires many specialized resources b. technology makes it more costly than market production c. tax avoidance is undesirable d. less control over the final product is desirable e. the opportunity cost of household work is relatively small
Discount lending ties into the Fed's function of:
A. regulation of banking. B. open market operations. C. lender of last resort. D. the government's bank.
When the inflation rate is high and volatile,
What will be an ideal response?