A perfectly competitive firm decides to shut down if:
a. the price falls below the average-total-cost.
b. average revenue falls below the average-variable-cost.
c. the price falls below the marginal cost.
d. the average revenue curve lies below the marginal cost curve.
e. the total revenue is less than total cost.
b
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Everything else held constant, if the sum of the required reserve ratio and the excess reserve ratio is greater than one, an increase in the currency-deposit ratio causes the M1 money multiplier to ________ and the money supply to ________
A) decrease; increase B) increase; increase C) decrease; decrease D) increase; decrease
"Animal spirits" refers to
A) the stubborn refusal of many economic decision-makers to use rational expectations. B) movements in investment that cannot be explained by changes in current variables. C) the often-observed Fed refusal to cooperate with the government in setting its monetary policy. D) the impact of tax-evasion on the budget deficit. E) an exotic alcoholic drink favored by Wall Street traders.