The Federal Reserve System provides banking services to ________ because ________
A) consumers and businesses; it is a central bank with responsibilities to the entire U.S. population
B) banks and businesses; it is a central bank with the primary purpose of regulating financial institutions and markets
C) commercial banks; it is a central bank with the primary purpose of regulating financial institutions and markets
D) no one; it is a central bank with the primary purpose of regulating financial markets
E) FDIC insured banks; they are the ones that have paid their membership fees and the only ones the U.S. central bank guarantees
C
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A monopolistically competitive firm makes positive economic profits if ________
A) price is less than average total cost B) price is higher than average total cost C) price equals marginal cost D) price equals average fixed cost
An appreciation of the U.S. dollar makes foreign goods cheaper relative to American goods, resulting in a ________ in net exports in the U.S. and a ________ shift of the IS curve in the U.S., everything else held constant
A) fall; leftward B) rise; leftward C) fall; rightward D) rise; rightward
Why is the change in reserve requirement not frequently used to control the supply of money?
The precautionary principle is most likely to be applied when some impacts
a. Involve option values b. Are irreversible c. Are converted to present values d. Are estimated using the avoided cost approach e. Involve indirect use values