At its regular meetings, the FOMC decides to sell or buy government bonds, an action referred to as ______.
a. reserve requirement alterations
b. open market operations
c. discount rate management
d. interest rate changes
b. open market operations
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The table below shows four alternative techniques for assembling a car. The cost of labor is $20 per hour, and the cost of capital is $10 per hour. Which of the four techniques for assembling a car is economically efficient?
A) T-1 B) T-2 C) T-3 D) T-4
Which of the following statements best describes countries with controlled economies in the 1970s?
a. Countries with controlled economies in the 1970s, historically had very low rates of measured inflation—because prices were forbidden to rise by law, except for the cases where the government deemed a price increase to be due to quality improvements. b. Countries with controlled economies in the 1970s, historically had very high rates of measured deflation—because prices were forbidden to rise by law, except for the cases where the government deemed a price increase to be due to quality improvements. c. Countries with controlled economies in the 1970s, historically had very low rates of measured deflation—because prices were forbidden to rise by law, except for the cases where the government deemed a price increase to be due to quality improvements. d. Countries with controlled economies in the 1970s, historically had no inflation—because prices were forbidden to rise by law, except for the cases where the government deemed a price increase to be due to quality improvements.
The large increase in oil prices in the 1970s was caused primarily by a(n)
a. increase in demand for oil. b. decrease in demand for oil. c. decrease in the supply of oil. d. increase in the supply of oil.
A monopolistic ally competitive firm is producing at a short-run output level where average total cost is $10.00, marginal cost is $5.00, marginal revenue is $6.00, and price is $12.00. In the short run, the firm should:
A. Decrease the level of output B. Increase the level of output C. Make no change in the level of output D. Increase product price