The discount rate is the interest rate charged by:
A. major banks to their best customers.
B. banks for overnight loans to other banks.
C. the Fed on loans of reserves to banks.
D. banks for loans of less than 24 hours.
Answer: C
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A) specified; work of authorship B) unspecified; innovation C) specified; innovation D) unspecified; work of authorship
A competitive industry consists of 100 firms. The short-run marginal cost curve for each firm is given by MC = 200 + .3Q. The demand curve faced by the industry is given as P = 400 - .1Q. What is the equilibrium price and quantity produced by the industry as a whole?
What will be an ideal response?
If a firm sold $700 worth of goods that cost $800 to produce:
A. aggregate income would still equal GDP. B. aggregate income would no longer equal GDP. C. the firm's loss would not be added to aggregate income. D. aggregate income would be negative.
The general equilibrium analysis of a minimum wage applied to only some sectors of the economy suggests that
A) workers in all sectors will face increased wages. B) some workers in the covered sectors will lose their jobs and remain unemployed. C) some workers originally employed in the covered sectors will move to the uncovered sectors, driving down wages in the uncovered sectors. D) all workers will be worse off.