For a profit-maximizing monopolistically competitive firm, price exceeds marginal cost in
a. the short run but not in the long run.
b. the long run but not in the short run.
c. both the short run and the long run.
d. neither the short run nor the long run.
c
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Suppose a bank has $100,000 in checking account deposits with no excess reserves and the required reserve ratio is 10 percent. If the Federal Reserve raises the required reserve ratio to 12 percent, then the bank will now have excess reserves of
A) $12,000. B) $0. C) -$2,000. D) -$12,000.
Suppose an investment bank has a leverage ratio of 10 and the value of its securities decline by 10%. What happens to its return on equity investment?
A) declines by 1% B) increases by 1% C) declines by 100% D) increases by 100%
Technical and "junior" colleges offering full-time degree programs that may be completed in two years or less are a rapidly growing segment of the U.S. economy. What are some likely impacts on aggregate flows into and out of employment status?
What will be an ideal response?
Studies have shown that
A) firms often cut nominal wages during recessions and allow inflation to gradually increase real wages. B) firms are reluctant to cut nominal wages during recessions but instead increase workers' nominal wages and allow inflation to gradually increase real wages. C) firms are reluctant to cut nominal wages during recessions but instead freeze workers' nominal wages and allow inflation to gradually reduce real wages. D) firms often freeze workers' nominal wages during a recession and keep the wages frozen well after the recession has ended.