In the real world, policy makers apply the money multiplier to reserves to predict the amount of money in the economy.
Answer the following statement true (T) or false (F)
False
Policy makers pick an interest rate, then choose a money supply consistent with that interest rate, and then choose the level of reserves consistent with that money supply.
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In a perfectly competitive market, the market price is $23. At the current level of output, a firm has a marginal cost of $28. What should the firm do?
A) produce a larger output to make more profit B) nothing, it is currently maximizing profit C) produce less output to make more profit D) shut down E) raise the price of its product
Suppose a glass of orange juice has a price of $2 and a glass of soft drink has a price of $1 . If the consumer is maximizing utility,
a. juice must have higher MU than soda drink b. the soft drink must have higher MU than juice c. both must have equal MU d. consumers would buy more soda drink than orange juice e. the consumer would buy twice as much orange juice as soft drink