Which of the following statement is correct?

a.Marginal cost will equal average total cost when marginal cost is at its lowest point.

b.When marginal cost is less than average total cost, average total cost will rise.

c.When marginal cost is greater than average total cost, average total cost will fall.

d.Marginal cost will equal average total cost when average total cost is at its lowest point.

If the Reserve Bank of Australia sells financial securities, this:

a.

decreases bank reserves, increases interest rates, and discourages banks to make more loans.

b.

decreases bank reserves, increases interest rates, and encourages banks to make more loans.

c.

increases bank reserves, causes banks to increase their loans, and increases interest rates.

d.

increases reserves, causes banks to reduce their loans, and decreases interest rates.

Compared with a firm under perfect competition, a firm under monopolistic competition ____________.

a.faces high barriers when entering the market.

b.sells identical products.

c.makes high profits both in the short run and in the long run.

d.sells differentiated products.

The share of ________ that a bank does not loan out or spend on securities is known as ________.

a.loans; reserves

b.deposits; securities

c.deposits; reserves

d.loans; securities