At any quantity at which the demand curve lies above the supply curve,
The federal funds rate is not just targeted by the Fed but is determined by the Fed.
Market forces are irrelevant.
When members of a group enjoy different opportunities that cannot be attributed to
differences in ability,
An increase in the stock of human capital would
a. shift the production function upward, lowering productivity and raising living
standards
b. shift the production function upward, raising productivity and living standards
c. cause the economy to move along a fixed production function, increasing both
productivity and living standards
d. cause the economy to move along a fixed production function, reducing both
productivity and living standards
e. shift the production function downward, reducing both productivity and living
standards
One problem with average cost pricing for a natural monopoly is that
In the market for euros, Americans want to buy euros
a. only to buy goods from European firms
b. primarily to buy services from European firms
c. only to buy European assets
d. only to buy European goods and assets
e. to buy European goods, services, and assets
If the inflation rate is lower than expected, real income is redistributed from lenders to
borrowers.
The marginal revenue product of capital is
With which of the following responses would the Census Bureau declare the person
unemployed?
a. “I am currently working full-time but my employer is going to lay me off tomorrow.”
b. “I am currently working part-time but I would like to work full-time.”
c. “I was working at two different jobs, I lost my primary job a few weeks ago, and I am
searching for a new job.”
d. “I would love a job but I am not looking for one because I have no chance of finding
one.”
e. “I just turned 16 and I am looking for a job.”
Knowing the number of firms in a market is the only information needed to identify the
structure of that market.
The deposit-creation process can continue as long as
a. banks have required reserves
b. banks have excess reserves
c. the Fed sells bonds
d. banks sell bonds to the public
e. the required reserve ratio does not change
If an economy has been operating below its potential output level,
a. frictional unemployment is too high
b. more individuals should begin entering the labor force
c. the government should create more jobs
d. unemployment is likely rising.
e. the production possibilities frontier will shift
Most economists believe that substitution behavior by consumers causes inflation
measured by the Consumer Price Index (CPI) to overstate the true rate of inflation.
Which of the following would lead to an increase in the demand for British pounds?
a. A declining interest in British goods
b. A decrease in the U.S. interest rate relative to the British interest rate
c. Expectations that the exchange rate will fall
d. A decrease of the U.S. price level relative to the British price level
e. A decrease in the exchange rate.
Figure 7-7 shows a firm’s total variable cost for different daily output levels. In
addition, the firm has total fixed cost of $50 per day. At an output level of 20 units,
average variable cost is
If average total cost per unit is minimized when a single producer supplies the entire
market, this indicates