When the Prime Rate Is High

question 27

Multiple Choice

When the prime rate is high:

• A)there is more money for banks to lend.
• B)there is an increase in the overall money supply.
• C)there is increased economic activity.
• D)there is an economic slowdown.

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Definitions:

Average Cost

Average cost, also known as unit cost, is the total cost of production divided by the number of units produced.

Maximize Profits

A business goal to achieve the highest possible profit by optimizing sales revenue and minimizing costs.

Constant Marginal

Pertains to a situation where the additional cost or benefit of producing one more unit of a good or service remains unchanged.

Average Cost

The sum of all production expenses divided by the amount of product made.