Between 1970 and 2000, if the Fed had tried to hit the money growth targets:
A. the interest rates would have likely been more stable.
B. the federal funds rate would have changed often and by large amounts.
C. the economy would have likely experienced very high inflation.
D. the economy would have likely experienced very high inflation but the interest rates would have likely been more stable.
Answer: B
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If an activity is worth pursuing at all, then it should be pursued up to the point where
a. total cost equals total benefit. b. average cost equals average benefit. c. marginal cost equals marginal benefit. d. sunk costs equal zero.
Refer to the table above, which gives five points on a nation's PPF. As we increase the production of X,
A) the output of Y increases. B) unemployment increases. C) the opportunity cost of each new unit of X increases. D) the opportunity cost of each new unit of X decreases.
Suppose a company increases production from a point where marginal cost equals average total cost to a point where marginal revenue and marginal cost are equal. Is it a good idea for the company to do this? Why? a. No; average total costs have increased which means the company is not minimizing losses
b. Yes; because average variable costs are always less than average total costs. c. No; because the marginal cost of producing the last unit is the same as the marginal revenue. d. Yes; even though the previous level of output had minimized the average total cost, there was still profit to be earned by producing additional units. e. No; the previous level of output was the most efficient because it had the lowest average total cost.
The term federal funds market refers to the market for overnight interbank reserve loans
a. True b. False Indicate whether the statement is true or false