A bank is less likely to borrow from the Fed when the __________ falls relative to the __________
A) discount rate; required reserve ratio
B) excess reserve; required reserves
C) discount rate; federal funds rate
D) federal funds rate; discount rate
D
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Advocates of flexible exchange rates claim that under flexible exchange rates, if the central bank faced unemployment
A) and thus wished to decrease its money supply, there would no longer be any legal barrier to the currency depreciation this would cause. B) and thus wished to expand its money supply, there would no longer be any legal barrier to the currency depreciation this would cause. C) and wished to expand its money supply, there would no longer be any legal barrier to the currency appreciation this would cause. D) and wished to decrease its money supply, there now would be a legal barrier to the currency depreciation this would cause. E) and wished to increase output, there would no longer be a legal barrier to the currency appreciation this would cause.
If a firm is operating at a loss in the short run and finds that its price is greater than average variable cost, then
A. it should produce where MR = MC. B. it should produce zero output. C. total revenue is greater than total costs. D. total revenue is less than total variable costs.