Refer to the table below. Suppose all firms in this industry have identical costs to this firm and are producing 15 units of output. One can predict thatQuantityTotal RevenueExplicit CostsImplicit Costs1050365157563620100937251251258301501619
A. firms will attempt to lower their implicit costs.
B. price must rise.
C. new firms will enter the industry.
D. old firms will exit the industry.
Answer: C
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The supply of high-powered money is $100,000 and the money supply is $500,000. If every individual wishes to hold 5% of his or her deposits in the form of cash, then the bank reserve-holding ratio must be
A) 0.25 if banks have made all loans acceptable by the Federal Reserve requirements. B) 0.20 if banks have not made all loans acceptable by the Federal Reserve requirements. C) 0.17 if banks have not made all loans acceptable by the Federal Reserve requirements. D) 0.16 for any of the legally required reserve amount.
A nation's growth rate will most likely ________ as it converges to a new, higher balanced growth path
A) speed up B) slow down C) maintain its current pace D) become negative