The federal funds market is the market where:
a. the federal government raises funds to cover its budget deficit.
b. the Federal Reserve System makes loans to commercial banks.
c. commercial banks with excess reserves make loans to commercial banks seeking reserves.
d. commercial banks make loans to the Federal Reserve.
c
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In perfect competition, an increase in fixed costs will eventually cause all except
A. reduction in industry output. B. reduction in a firm’s output. C. reduction in the number of firms. D. decrease in industry supply.
For a monopoly, MC = MR < P so that MC < MU.
Answer the following statement true (T) or false (F)
A change in the quantity demanded of Real GDP is graphically represented as a
A) shift in the AD curve. B) movement from one point on the AD curve to another point on the same curve. C) movement from a point on the AD curve to a point on the SRAS curve. D) shift in the real balance effect curve. E) shift in the interest rate effect curve.
Average fixed costs in the short-run:
a. increase as the quantity produced increases. b. decrease as the quantity produced increases. c. first decrease, then increase eventually as the quantity produced increases. d. first increase, then decrease eventually as the quantity produced increases.