The purchase and sale of government bonds by the Fed for the purpose of altering bank reserves is referred to as:
A. Open-market operations.
B. Closed-market operations.
C. Discounting.
D. Expansionary fiscal policy.
A. Open-market operations.
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A price ceiling represents
A) a maximum price that can be legally charged for a product or service. B) a minimum price that can be legally charged for a good or service. C) a lottery imposed upon producers by the government. D) a first come, first served mechanism for controlling prices.
The price-taker firm should discontinue production immediately if:
a. the market price exceeds the firm's average total costs. b. the market price is less than the firm's average variable costs. c. the market price is less than the firm's average total costs, but greater than its average variable cost. d. its accounting statement indicates that it is suffering losses.