Assume the marginal revenue from each additional unit of a good sold is 0. In this case, we can conclude that demand for the good is:
A) unit elastic
B) perfectly elastic.
C) perfectly inelastic.
D) relatively inelastic.
B
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Using the Taylor rule, if the current inflation rate exceeds the target inflation rate and real GDP exceeds potential GDP, then the federal funds target rate ________ the sum of the current inflation rate plus the real equilibrium federal funds rate
A) may be greater than or less than B) will be greater than C) will be the same as D) will be less than
Reverse repurchase agreements are often used to
A) increase bank reserves permanently. B) increase bank reserves temporarily. C) reduce bank reserves permanently. D) reduce bank reserves temporarily.
Which of the following will not cause the aggregate supply curve to fall?
a. A decrease in the nation's average price level (i.e., the implicit price index). b. An increase in input prices. c. A decrease in the value of the domestic currency. d. Natural disasters. e. None of these answers is correct.
Insurance works best in situations where:
a. there is a high probability of a large loss. b. the level of probability and the size of the loss are irrelevant. c. there is a high probability of a small loss. d. there is a low probability of a small loss. e. there is a low probability of a large loss.