Question
If the Federal Reserve System buys government securities from commercial banks and the public:
a. the money supply will contract
b. commercial bank reserves will decline
c. it will be easier to obtain loans at commercial banks
d. commercial bank reserves will be unaffected
Question
Normal profit is:
a. the average profitability of an industry over the preceding 10 years
b. determined by subtracting explicit costs from total revenue
c. the return to the entrepreneur when economic profits are zero
d. determined by subtracting implicit costs from total revenue
Question
The term “recession” describes a situation where:
a. an economy’s ability to produce is destroyed
b. output and living standards decline
c. inflation rates exceed normal levels
d. Government takes a less active role in economic matters