Which of the Following Is True

question 119

Multiple Choice

Which of the following is true?

• A) If there are only two firms in a market, prices must be above marginal cost.
• B) If there is only one firm in a market, prices must be above marginal cost.
• C) Both A and B are correct.
• D) None of the preceding answers is correct.

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Definitions:

Federal Reserve

The central banking system of the United States, which conducts the nation's monetary policy, regulates banks, maintains the stability of the financial system, and provides financial services to depository institutions, the U.S. government, and foreign official institutions.

Monetary Policy

Economic policy tools used by a central bank to control the supply of money, aiming to achieve macroeconomic objectives like controlling inflation, consumption, growth, and liquidity.

Interest-Rate Targets

The specific interest rates that central banks aim for in their monetary policy operations to influence economic conditions.

Money-Supply Targets

Economic policy goals that aim to control the amount of money available in the economy to ensure stability or encourage growth.