Question 36

Which of the following actions by the Federal Reserve is the most frequently used and which action would least likely be used for expansionary monetary policy?

Most frequently used   Least likely expansionary

A)    Open market operations Increasing the reserve requirement

B)   Open market operations Decreasing the discount rate

C)   Discount rate              Increasing the reserve requirement

D)   Discount rate              Decreasing the discount rate

Question 37

If a minimum wage is set above the equilibrium wage in the labor market, what is the most likely effect on labor supply?

A)    Firms will use less than the economically efficient amount of capital.

B)   There will be excess demand for labor and unemployment will decrease.

C)   The minimum wage will have no effect on the equilibrium.

D)   There will be excess supply of labor and unemployment will increase.

Question 38

Which of the following statements about price takers and price searchers is most accurate?

A)    In the long run, both price takers and price searchers maximize profits at the quantity corresponding to the minimum point on the average total cost curve.

B)   Price takers maximize profits at the point price = marginal revenue = marginal cost.

C)   In the long run, both price takers and price searchers will have zero economic profits.

D)   The potential allocative inefficiency of a price searcher engaged in monopolistic competition includes the social cost of producing where price = marginal cost.

Question 39

A generational imbalance is best described as:

A)    accounting for the taxes owed by and the benefits owed to each generation.

B)   the present value of future government deficits and how future generations deal with this problem.

C)   a difference between the present value of government benefits promised to current taxpayers and the taxes paid by current taxpayers.

D)   one generation being promised more government benefits than another generation.

Question 40

If the government regulates a natural monopoly and enforces an average cost pricing, what are the effects on output quantity and price compared to an unregulated natural monopoly?

       Output      Price

A)    Increase       Decrease

B)   Increase       Increase

C)   Decrease     Increase

D)   Decrease     Decrease

[此贴子已经被作者于2008-11-8 9:52:07编辑过]

答案和详解如下！

Question 36

Which of the following actions by the Federal Reserve is the most frequently used and which action would least likely be used for expansionary monetary policy?

Most frequently used   Least likely expansionary

A)    Open market operations Increasing the reserve requirement

B)   Open market operations Decreasing the discount rate

C)   Discount rate              Increasing the reserve requirement

D)   Discount rate              Decreasing the discount rate

The correct answer was A)  Open market operations Increasing the reserve requirement

The Federal Reserve's most powerful tool is open market operations. The Fed buys and sells Treasury bonds, notes, and bills as a way to control the monetary base.

The Fed would decrease, not increase, the reserve requirement to implement an expansionary policy. Decreasing the discount rate would serve to increase the growth rate of the money supply.

This question tested from Session 6, Reading 24, LOS e

Question 37

If a minimum wage is set above the equilibrium wage in the labor market, what is the most likely effect on labor supply?

A)    Firms will use less than the economically efficient amount of capital.

B)   There will be excess demand for labor and unemployment will decrease.

C)   The minimum wage will have no effect on the equilibrium.

D)   There will be excess supply of labor and unemployment will increase.

The correct answer was D) There will be excess supply of labor and unemployment will increase.

At a minimum wage above the equilibrium wage, there will be an excess supply of workers, since firms will not employ all the workers who want to work at the minimum wage. Firms will substitute other productive inputs for labor and use more than the economically efficient amount of capital. The result is increased unemployment because even though there are workers willing to work for less than the minimum wage, firms cannot legally hire them.

This question tested from Session 4, Reading 15, LOS b

Question 38

Which of the following statements about price takers and price searchers is most accurate?

A)    In the long run, both price takers and price searchers maximize profits at the quantity corresponding to the minimum point on the average total cost curve.

B)   Price takers maximize profits at the point price = marginal revenue = marginal cost.

C)   In the long run, both price takers and price searchers will have zero economic profits.

D)   The potential allocative inefficiency of a price searcher engaged in monopolistic competition includes the social cost of producing where price = marginal cost.

The correct answer was B) Price takers maximize profits at the point price = marginal revenue = marginal cost

Because price takers face a horizontal demand curve, they must take price as given and thus maximize profits when P = MR = MC.

The other statements are false. Although firms engaged in pure competition (price takers) maximize profits at the quantity corresponding to the minimum point on the average total cost curve (ATC) (in the long run), this is not necessarily true for price searchers. Price searchers face a downward-sloping demand curve. They produce at the quantity MR = MC and take price from the demand curve. The demand curve may be above the ATC curve. The potential allocative inefficiency of a price searcher engaged in monopolistic competition includes the social cost of not producing where P = MC. This potential allocative inefficiency may be outweighed by the benefits of product diversity. Some price searchers, (monopolists, for example), can earn positive economic profits in the long run.

This question tested from Session 5, Reading 20, LOS b

Question 39

A generational imbalance is best described as:

A)    accounting for the taxes owed by and the benefits owed to each generation.

B)   the present value of future government deficits and how future generations deal with this problem.

C)   a difference between the present value of government benefits promised to current taxpayers and the taxes paid by current taxpayers.

D)   one generation being promised more government benefits than another generation.

The correct answer was C) a difference between the present value of government benefits promised to current taxpayers and the taxes paid by current taxpayers.

A generational imbalance occurs when the present value of government benefits promised to the current generation of workers is not paid for by current taxes and must be paid for by future generations.

The generational effect refers to how future generations pay for a generational imbalance through either higher taxes or decreased government spending. Generational accounting involves measuring the taxes owed by and the benefits owed to each generation.

This question tested from Session 6, Reading 27, LOS c

Question 40

If the government regulates a natural monopoly and enforces an average cost pricing, what are the effects on output quantity and price compared to an unregulated natural monopoly?

       Output      Price

A)    Increase       Decrease

B)   Increase       Increase

C)   Decrease     Increase

D)   Decrease     Decrease

The correct answer was A)  Increase       Decrease

Average cost pricing is meant to force a natural monopolist to reduce price to where the firm’s average total cost intersects the market demand curve. This results in higher output and a lower price than an unregulated natural monopolist would choose.

This question tested from Session 5, Reading 19, LOS e

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