The Fed prefers to change its interest rate target only rarely because
a. those targets affect productivity in the labor force
b. a fluctuating stock and bond market signals a recession
c. interest rates are greatly overrated as a measure of economic performance
d. it is so difficult to do so
e. the changes destabilize the financial markets
E
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Seignorage is also known as an inflation tax since ________
A) money balances lose value in real terms B) inflation can be caused by rising energy costs C) higher interest rates can crowd-out investment spending D) budget deficits entail an increase in the size of the national debt
When deciding what price to charge customers, a firm may choose to charge different prices based on customers'
a. Age b. Willingness to pay c. Location d. All of the above
A demand curve:
a. has a positive slope. b. illustrates the negative relationship between price and quantity demanded. c. illustrates the positive relationship between price and quantity demanded. d. is based on the assumption of a stable supply curve. e. shifts about in a random fashion.
A profit-maximizing firm should shut down in the short run if the average revenue it receives is less than:
A. average total cost. B. average fixed cost. C. marginal cost. D. average variable cost.