In maximizing net gains, the perfectly competitive firm will seek to:
a. minimize average variable cost.
b. minimize average total cost.
c. minimize marginal cost.
d. maximize profit.
Ans: d. maximize profit.
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
When the price of a product exceeds the marginal cost of producing it, producers have a
A) consumer surplus. B) producer surplus. C) consumer shortage. D) producer shortage. E) deadweight surplus.
You purchase a share of Facebook stock from a friend who purchased the stock 1 year ago. Your purchase of the stock represents a transaction in the primary financial market
Indicate whether the statement is true or false
Assume that the required reserve ratio is 5 percent. If a commercial bank has $2 million cash in its vault, $1 million in government securities, $3 million on deposit at the Fed, and $60 million in checkable deposits, then its excess reserves equal:
A. $0 million B. $2 million C. $5 million D. $6 million