The money-creation process generated by an injection of reserves stops when
A. people deposit their loans into other banks.
B. reserve requirements are raised.
C. the increase in required reserves equals the size of the injection.
D. bankers begin to fear runs and stop making loans.
Answer: C
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Almost all corporate bonds are sold through
A) auction markets. B) brokers. C) commercial banks. D) underwriting syndicates.
The leaders of a major technology firm are optimistic, and they decide to sell more shares of stock and build some new facilities. Based on their actions, it is most likely that the securities market is ______.
a. falling quickly b. rising quickly c. having mixed results d. bottoming out
With deflation, people will
A. delay their purchases of goods in hopes prices will fall further. B. feel compelled to borrow money. C. see their paycheck rise as bosses seek to reward high performers. D. buy goods earlier than they had originally planned.
Refer to the diagram. In short-run equilibrium, the monopolistically competitive firm shown will set its price:
A. will realize allocative efficiency at its profit-maximizing output.
B. cannot operate at a loss.
C. is in long-run equilibrium.
D. is realizing an economic profit.