Unemployment payments
a. rise during a recession and thus reduce the severity of the recession
b. rise during a recession and thus increase the severity of the recession
c. rise during inflationary episodes and thus reduce the severity of the inflation
d. fall during inflationary episodes and thus increase the severity of the inflation
e. fall during a recession and thus increase the severity of the recession
A
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The rate of interest banks charge other banks for overnight loans of reserves is the
A) prime rate. B) discount rate. C) federal funds rate. D) real rate.
Average revenue minus average total cost equals
a. total economic profit b. total accounting profit c. a normal profit d. economic profit per unit of output e. marginal cost
Which of the following is true?
a. If the consumer is a buyer of several units of a good, the earlier units will have greater marginal value and therefore create more consumer surplus, because marginal willingness to pay falls as greater quantities are consumed in any period. b. When some units of output can be produced at a cost that is lower than the market price, the seller receives a surplus, or net benefit, from producing those units. c. At the market equilibrium both consumers and producers benefit from trading every unit up to the market equilibrium output. d. All of the above are true.
Inflation can reduce the true cost of debt, and policymakers lower interest rates to encourage borrowing. Is it a good idea then to always take advantage of lower interest rates to borrow and rely on inflation to reduce the cost of debt and to increase your ability to repay the loan?
What will be an ideal response?