Which of the Following Statements Is Correct

question 90

Multiple Choice

Which of the following statements is correct?

• A)The discount rate is generally above the federal funds rate.
• B)The discount rate is generally below the federal funds rate.
• C)The discount rate is generally equal to the federal funds rate.
• D)There is no general pattern to the relation between the discount rate and the federal funds rate.

---

Definitions:

Diseconomies of Scale

The condition in which a company or production process becomes less efficient as it grows larger, leading to increased costs per unit.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, and firms make no economic profit or loss.

Long-Run Average Cost Curve

A graphical representation showing the minimum average cost of producing any given level of output when all inputs, including capital, are variable.

Short-Run Average Cost Curve

A graphical representation that shows how the average cost of production changes with varying output levels in the short term.