Suppose the marginal product of labor equals 1/L. If the firm can sell its output for $10 per unit, and the wage is $1 per unit, how many units of labor will the firm hire?

"Inflation Targeting Rule" is a special case of a

A) Taylor Rule with zero weight on output. B) Taylor Rule with zero weight on inflation. C) Taylor Rule with an equal weight on output and inflation. D) Taylor Rule with different but positive weights on output and inflation.

If the Fed buys $10 million dollars in government securities, and the required reserve ratio is 20 percent, the banking system is able to expand the money supply by:

A. $10 million. B. $50 million. C. $2 million. D. $40 million.