If a firm is producing an output rate at which marginal cost is equal price, the firm
A) is maximizing profits.
B) should increase its output level.
C) should reduce its output level.
D) will not be covering its fixed cost.
Answer: A
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The Federal Reserve cut the federal funds rate seven times between September 2007 and March 2008. What event led the Fed to make these reductions in the federal funds rate?
A) The chairman of the Federal Reserve System persuaded members of the Federal Open Market Committee to lower interest rates in order to reduce the price of oil in international markets. B) It was in response to reductions in the discount rate, which was also lowered seven times over the same time period. C) Several large investment banks failed during this time period. D) During this period there was a substantial reduction in the demand for housing.
In a partnership, debts accumulated by one partner
A) are the responsibility of that partner only. B) are the responsibility of the other partners as well. C) are the responsibility of all the employees of the partnership, regardless of whether those employees are partners. D) are the responsibility of the other partners only up to the amount each partner initially invested in the partnership.