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Question - Wadena Search and rescue estimates the monthly cost of responding to emergency calls to be $90,000, plus $450 per call.
A-1. In a month in which the company responds to 90 emergency calls, determine the estimated total cost of responding to emergency calls.
A-2. In a month in which the company responds to 90 emergency calls, determine the estimated average cost of responding to emergency calls.
B. Assuming that in a given month, the number of emergency calls was unusually high. Would you expect the average cost of responding to emergency calls during this month to be higher or lower than in other months?
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
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