The federal funds rate is
a. the Fed's discount rate
b. the difference between the discount rate that the Fed charges banks and the primerate that banks charge their borrowers
c. the interest rate on loans made by banks in the federal funds market
d. the interest rate on loans made by the Fed in the federal funds market
e. the interest rate banks pay to the Fed for belonging to the FDIC
C
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Which of the following is an example of the law of demand?
A) A decrease in the price of milk is followed by an increase in milk purchases. B) A decrease in the price of milk is followed by a decrease in milk purchases. C) An increase in the price of milk has no effect on the amount of milk purchased. D) The amount of milk purchased increases when the price is constant.
When diminishing marginal returns set in, marginal product is
a. positive and increasing b. positive and decreasing c. negative and increasing d. negative and decreasing e. zero