All successful bidders in a Treasury bill auction pay the __________ price for their bids

Suppose that there is an increase in the demand for money. What is the appropriate monetary policy response in the New Keynesian sticky price model?

A) an increase in the interest rate target B) no change in the interest rate target C) a decrease in the interest rate target D) an increase in government spending

Suppose Ernie gives up his job as a financial advisor for pets, for which he earned $30,000 per year, to open up a store selling spot remover to Dalmatians. He invested $10,000 of his savings, which had been earning 5 percent interest. This year's revenues in the new business were $50,000 and explicit costs were $10,000 . Calculate Ernie's economic profit

a. $10,000 b. $50,000 c. $20,000 d. $40,000 e. $9,500