Is monetary policy more effective in recessions or inflationary periods? Explain
Monetary policy is more effective in inflationary periods when the Fed tries to curb inflation than it is in
recessions when the Fed tries to promote employment. This is because the Fed can prevent banks from
making loans during inflationary periods by reducing their excess reserves, but it cannot force people to
borrow during recessions when it takes steps to increase banks' excess reserves.
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What is the "unit of account" function of money?
A. a common measurement of the relative value of different goods and services B. the ability of money to hold value over time C. the quality of money not to be hoarded because of its commodity value D. the function of money to be widely accepted I exchange for goods and services
If a firm's total costs are $100 when 10 units of output are produced and $103 when 11 units of output are produced, the marginal cost of the 11th unit is
A. $1. B. $3. C. $5. D. $9.36.
Refer to Scenario 13.2 below to answer the question(s) that follow. SCENARIO 13.2: The government of Stratospheria is currently inviting investors to bid for the exclusive right to provide cable television service to its residents. The market demand for this service is P=55-0.01Q, where Q is the number of households that would subscribe to the cable service and P is the monthly fee charged to the subscribers. The associated marginal revenue curve is MR=55-0.02Q. Fun Cable Company is interested in bidding for the right to provide cable service in Stratospheria. It has a constant average and marginal cost of $5 for providing cable service to each household.Refer to Scenario 13.2. What is the most Fun Cable Company would bid for the franchise?
A. $0 B. $62,500 C. $75,000 D. $112,500
The demand for massage therapists declined in the spring of 2016, but the starting wages paid to massage therapists was still the same at the end of 2016. This is an example of a
A. highly regulated market. B. price control. C. sticky price. D. flexible price.