The Federal Funds rate is the interest rate
a. banks charge each other for short-term loans.
b. the Fed charges depository institutions for short-term loans.
c. the Fed pays on deposits.
d. interest rate on 3 month Treasury bills.
a
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What is the opportunity cost of producing capital goods such as a new road?
What will be an ideal response?
In an open economy, the government purchases multiplier will be larger the
A) larger the marginal propensity to consume. B) smaller the marginal propensity to import. C) smaller the marginal income tax rate. D) All of the above are correct.
Suppose you drink more tea because the price of coffee has increased. Which of the following best explains your action?
a. the law of supply b. tea and coffee are complements c. the substitution effect d. the income effect e. your nominal income has increased
A monopolist will
a. never produce at an output level where marginal cost is positive b. always produce at an output level where marginal revenue is positive c. seek network externalities whenever switching costs are high d. always produce where marginal revenue exceeds price e. never produce where marginal revenue exceeds marginal cost