The interest rate that the Fed charges on loans made directly to banks is called ________.
A. the prime rate
B. the discount rate
C. interest on reserves
D. the federal funds rate
Answer: B
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In the federal funds market, _____
a. banks make loans to the Fed b. banks make short-term loans to other banks c. banks make long-term loans to other banks d. the Fed makes short-term loans to private borrowers e. the Fed makes long-term loans to commercial banks
Behaving strategically:
A. is an essential part of game theory. B. means recognizing that the actions of others will affect the trade-offs you face, and acting accordingly. C. involves rational decision making. D. All of these statements are true.
If the marginal revenue product of land is less than its price, a firm should
A. increase the price it is willing to pay for land. B. use more land. C. use less land. D. try to increase the productivity of land.
If the rate of depreciation increases, then user cost ________ and the desired capital stock ________.
A. rises; rises B. rises; falls C. falls; rises D. falls; falls