If you were the chairman of the Fed and had to develop effective countercyclical monetary policy during a recession, you would lower
a. the legal reserve requirement, cut the discount rate, and sell government bonds on the open market
b. the legal reserve requirement, raise the discount rate, and sell government bonds on the open market
c. the legal reserve requirement, raise the discount rate, and buy government bonds on the open market
d. the discount rate, cut the discount rate, and raise the margin requirement
e. the reserve requirement, lower the discount rate, and buy government bonds on the open market
E
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Reservation price is: a. the maximum amount a customer would be willing to pay for a unit of output. b. the minimum price at which a seller would be willing to supply the product. c. always equal to the marginal cost
d. the same as market price.
You won a free ticket to see the latest Star Wars movie this Friday night (which you can costlessly resell for its face value of $15). Your favorite band is also performing on Friday and is your only alternative activity. Friday is your last chance to see either the movie or the band. Tickets to see your favorite band cost $30, and on any given day, you would be willing to pay as much as $50 for a ticket. Based on this information, what is your opportunity cost of going to see the Star Wars movie on Friday?
A. $50 B. $35 C. $30 D. $0