The marginal revenue for a single-price monopoly with a downward-sloping demand curve
A) is less than the price.
B) is greater than the price.
C) is equal to the price.
D) might be more than, less than, or equal to the price, depending on whether the slope of the demand curve exceeds 1.0 in magnitude.
E) might be more than, less than, or equal to the price, depending on whether the price elasticity of demand exceeds 1.0 in magnitude.
Answer: A) is less than the price.
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In order to change the money supply, the Fed might use which of the following tools?
A. Dual mandate B. Reserve requirement C. Deficit spending D. Fiscal policy
Agencies exist which rate bonds based on characteristics of the borrower. Such bond rating agencies are an example of a financial market response designed to:
A. transfer risk from the buyer to the rating agency. B. decrease the real return to bondholders. C. provide a lower cost solution to the high cost of information. D. increase information asymmetry.
The interest rate effect suggests that
A. a decrease in the price level decreases the interest rate, which causes businesses and consumers to reduce desired spending. B. an increase in the price level increases the money supply, which causes businesses and consumers to increase desired spending. C. an increase in the price level decreases the interest rate, which causes businesses and consumers to reduce desired spending. D. an increase in the price level increases the interest rate, which causes businesses and consumers to reduce desired spending.
Money is useful because it serves as a
A. good memorial to national leaders. B. stimulus to the printing industry. C. never wears out. D. store of value.