How would you describe an economy that uses its resources to make the greatest possible number of goods and services?

Assume the desired reserve ratio is 10 percent, banks loan all excess reserves and the currency drain is zero. If the Fed sells $100 million of U.S. government securities to Boise Bank, the monetary base increases by

A) $1 million. B) $10 million. C) $100 million. D) $1,000 million. E) $90 million.

At equilibrium, each firm will realize:

Refer to the cost table above. Now suppose that there are 600 identical firms in this industry, each with the same cost data as the single firm discussed above. Suppose, too, that the demand curve for this industry is as follows:







A. An economic profit of $155

B. An economic profit of $35

C. A loss of $45

D. A loss of $135