The Shape of the Average Total Cost Curve Is Determined

question 142

Multiple Choice

The shape of the average total cost curve is determined by the shape of

• A)the marginal cost curve.
• B)the average fixed cost curve.
• C)the average product curve.
• D)the firm's production function.

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Definitions:

Reserve Ratio

A central bank regulation that sets the minimum fraction of customer deposits and notes that each commercial bank must hold as reserves rather than lending out.

Reserve Requirement

The portion of depositor's balances that banks must have on hand as cash or in deposits with the central bank, a tool used by central banks to control the money supply.

Reserve Requirement

The lowest sum of money that a bank is required to keep as reserves against the deposits it holds, as mandated by the central bank.

Federal Funds Rate

The interest rate at which banks lend reserves to each other overnight, a key tool of monetary policy used by the Federal Reserve to influence the economy.