When banks borrow from each other the interest rate charged is known as the
a. discount rate.
b. prime rate.
c. federal funds rate.
d. over-the-counter rate.
c. federal funds rate.
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Four stores have a problem with theft and security is a public good. Let S stand for the number of person-hours of security patrols per week. The marginal benefit of security patrols to each of the stores is given by the formula MB = 200/(1 + S). Patrols cost $25 per hour. Which of the following gives the marginal social benefit function?
A. MSB = 50/(1 + S) B. MSB = 4 + [200/(1 + S)] C. MSB = 800/(1 + S) D. MSB = [200/(1 + S)] - 4
A pure private good is _____ and _____
a. nonexcludable; private in consumption b. excludable; private in consumption c. excludable; collective in consumption d. nonexcludable; collective in consumption
If the Fed's monetary policy causes a substantial decrease in interest rates, what is the most likely impact on velocity?
a. It will decrease. b. It will increase. c. It will remain constant. d. Velocity is unrelated to interest rates.
"Goodwill" is an example of
A. a public service industry. B. physical capital. C. intangible capital. D. financial capital.