A firm produces output according to the production function, q = L4/3K1/2 and faces input prices equal to w = $20 and r = $80. What is the minimum cost of producing 1140 units of output?

If the government of a developing country reduces its budget deficit, then the inflation tax:

A. should decrease. B. should not change. C. may increase, decrease, or not change depending on whether the government cuts taxes or raises government expenditures. D. should increase.

If the Fed increases its discount loans to banks, makes an open market purchase of Treasury securities, or increases its foreign exchange reserves, the impact on its balance sheet will be the same. In each case the Fed's assets and liabilities will both increase; the level of reserves increases and the monetary base expands. All three of these actions have the same effect because they all result in an increase in the reserves available to the banking system, which therefore means an increase in the base.

Which one is correct? a. True b. False