Which of the Following Statements Is False

question 259

Multiple Choice

Which of the following statements is false?

• A)In a long-run equilibrium, marginal firms make zero economic profit.
• B)To maximize profit, firms should produce at a level of output where price equals average variable cost.
• C)The amount of gold in the world is limited.Therefore, the gold jewelry market probably has a long-run supply curve that is upward sloping.
• D)Long-run supply curves are typically more elastic than short-run supply curves.

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Definitions:

Bank Runs

A situation where a large number of a bank's depositors try to withdraw their funds simultaneously over concerns about the bank's solvency.

Reserve Banking

A banking system in which banks hold a fraction of their deposits in reserve, while lending out the remainder to generate profits.

Federal Funds Rate

The interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight, on an uncollateralized basis.

Reserve Requirement

A regulatory mandate on banks to hold a certain percentage of their deposits in reserve either in their vaults or at the central bank.