A key causal link in the interest-rate-based transmission mechanism for monetary policy is from
A) investment to the interest rate.
B) the money supply to excess reserves.
C) a monetary policy action to excess reserves.
D) real GDP to investment.
C
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The most important source of financial capital for firms today is
A) sale of bonds. B) sale of new issues of stock. C) trade of previously issued stock. D) reinvestment of profits.
What event led to the end of the Great Moderation?
A. The Great Depression B. The Great Crash C. Stagflation D. The Great Recession
Though many assets can be used as a store of value, money is a particularly attractive method to store value because:
A. it increases in value as prices rise. B. its purchasing power does not decline when prices rise. C. it is the most liquid of all assets. D. it is backed by gold.
You observe that at your current production of rutabaga, the average total cost of producing rutabaga is $1 and the marginal cost of producing rutabaga is $2. What should always happen if you increase rutabaga production?
A. Marginal cost will fall. B. Average total cost will rise. C. Average total cost will fall. D. Both Marginal cost will fall and Average total cost will rise are correct.