Changes in the Money Supply Can Affect

question 27

Multiple Choice

Changes in the money supply can affect

• A) expected inflation rates.
• B) actual inflation rates.
• C) the supply of loans.
• D) a and b
• E) a,b and c

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Definitions:

Average-fixed-cost Curve

A curve that shows the relationship between the average fixed cost of producing a good and the quantity of the good produced, typically declining as production increases.

Marginal Product

The increase in output that results from employing one more unit of a particular input, holding all other inputs constant.

Explicit Costs

Direct, out-of-pocket expenses paid by firms for inputs to production, such as wages, rent, and materials, as opposed to implicit costs which are not directly paid out in cash.

Implicit Costs

The opportunity costs that are not directly paid for or incurred during the production of a good or service.