Banks want to minimize their holdings of excess reserves because:
a. they will be penalized by the Federal Reserve System if excess reserves are too high
b. required reserves are also minimized when banks minimize their holdings of excess reserves.
c. the money multiplier becomes too large if the excess reserves are high.
d. they want to borrow more on the federal funds market.
e. excess reserves earn no interest.
e
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Three hundred paper mills compete in the paper market. The total cost of production (in dollars) for each mill is given by the formula TC = 1,000Qmill + (Qmill)2, where Qmill indicates the mills annual production in thousands of tons. The marginal external cost of a mill's production (in dollars) is given by the formula MEC = 200 + 2Qmill. Finally, annual market demand (in thousands of tons) is given by the formula Qd = 200,000 - 100P. What is the competitive price?
A. $1,400 B. $920 C. $7,000 D. $1995
For Christmas travel, prices have been up about __% this year compared with last year
Fill in the blank(s) with the appropriate word(s).
Related to the Economics in Practice on p. 647: Surveys by the bank of England suggest that two important factors in influencing consumer perceptions of inflation are ________ and ________.
A. the value of the British pound; the value of the euro B. gas prices; media attention to price increases C. interest rates; the unemployment rate D. food prices; the stock of money
Using the notation Pt to designate this period's price level and Pt-1 to designate last period's price level, the formula for measuring the inflation rate from last period to this period is
A) [(Pt - Pt - 1 ) / Pt] × 100. B) [(Pt -1 - Pt) / Pt - 1] × 100. C) [(Pt - Pt - 1 ) / Pt - 1] × 100. D) [(Pt -1 - Pt) / Pt] × 100.