The Fed uses the federal funds rate to pursue its twin goals of:
a. exchange rate stability and maximum GDP
b. interest rate stability and maximum GDP.
c. deflation and maximum GDP.
d. price stability and maximum employment.
e. interest rate stability and maximum employment.
d
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A cost due to an increase in activity is called
A) an incentive loss. B) a marginal cost. C) a negative marginal benefit. D) the total cost.
As the economy nears the end of an expansion, which of the following do we typically see?
A) falling wages relative to output prices B) rising interest rates C) rising firm profits D) rising levels of firm investment
In the short run, a perfectly competitive firm can earn: a. positive economic profits. b. zero economic profits
c. negative economic profits. d. any of the above.
Increases in the wage rates of coal miners and decreases in the price of natural gas would cause the price of coal to
A. rise, but the equilibrium quantity of coal would rise or fall depending on the magnitude of the changes. B. rise, fall, or remain unchanged depending on the magnitude of the changes, but the equilibrium quantity of coal would increase. C. fall, but the equilibrium quantity of coal would rise or fall depending on the magnitude of the changes. D. rise, but the equilibrium quantity of coal would fall. E. rise, fall, or remain unchanged depending on the magnitude of the changes, but the equilibrium quantity of coal would fall.