Changes in the legal reserve requirement
a. are often implemented by the Fed to avoid disruption to both bank and borrowers
b. affect total bank reserves
c. are actively pursued by the member banks of the Fed
d. are used to limit the lending activity of banks
e. help to create the certainty that banks prefer to avoid
D
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Answer the next question based on the following payoff matrix for two oligopolistic firms in which the numbers indicate the economic profit in thousands of dollars for a high-price or a low-price strategy. Firm X? High PriceLow PriceFirm YHigh priceA = $625A = $725??B = $625B = $475?Low priceA = $475A = $400??B = $725B = $400If both firms operate independently and do not collude, the most likely economic profit is
A. $625,000 for firm X and $625,000 for firm Y. B. $475,000 for firm X and $725,000 for firm Y. C. $400,000 for firm X and $400,000 for firm Y. D. $725,000 for firm X and $475,000 for firm Y.
The five categories of income used in the income approach to the measurement of GDP are
A) consumption, saving, rental income, corporate profits, and investment. B) employee compensation, net interest, rental income, corporate profits, and proprietor's income. C) employee compensation, consumption, rental income, corporate profits, and proprietor's income. D) employee compensation, saving, rental income, corporate profits, and investment.
We have an inflationary gap when
A. equilibrium GDP is greater than full employment GDP. B. full employment GDP is greater than equilibrium GDP. C. equilibrium GDP is equal to full employment GDP. D. None of the choices are correct.
Electric utilities sometimes charge higher prices for electricity used for illumination and lower prices for electricity used for heat. These lower prices for electric heat result primarily from:
A. economies of scale in electric heat generation. B. the existence of good heating substitutes. C. prices for electric heat being set at the socially optimal level. D. strict government regulation of the price charged for electric heat.