Open market transactions involve which of the following activities?
I. issuing new Federal Reserve notes
II. buying or selling newly issued government bonds to raise funds for the government
III. buying or selling previously issued government bonds to change the volume of bank reserve
A) I only
B) II only
C) III only
D) II and III only .
E) I, II ,and III
Ans: C) III only
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A firm's long-run position under perfect competition is often said to be efficient because
A) P = AR > MC = AVC. B) P = AR > MR = MC. C) P = MR = AVC = AFC. D) P = MR = MC = ATC.
By driving onto a congested road for which no toll is charged, a driver
a. contributes to the overuse of a common resource. b. contributes to a negative-externality problem. c. is inflicting additional time cost on all of the other drivers. d. All of the above are correct.