Commercial bank reserves are an asset to commercial banks but a liability to the Federal Reserve Bank holding them.
Answer the following statement true (T) or false (F)
True
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In perfect competition, all the following situations arise except ________
A. firms produce an identical good or service B. each firm chooses the price at which to sell the good it produces C. firms can sell any quantity they choose to produce at the market price D. buyers know each seller's price
Sally quit her job as an auto mechanic earning $50,000 per year to start her own business. To save money she operates her business out of a small building she owns which, until she started her own business, she had rented out for $10,000 per year
She also invested her $20,000 savings (which earned a market interest rate of 5% per year) in her business. You are given the following information about the first year of her operations. Total revenue $120,000 Cost of labor 40,000 Cost of materials 15,000 Equipment rental 5,000 a. Calculate her economic costs. b. Calculate her accounting costs. c. Calculate her implicit costs. d. Sally tells you that she would really like to move to a location closer to town but she decided against it because "right now I don't pay any rent and it will cost me $10,000 a year to rent near town." Do you agree with her reasoning?
The marginal social cost and private cost curves for a particular common property resource are upward sloping
What happens to the gap between teh actual quantity and the socially optimal quantity as the demand for the resource becomes more inelastic? A) Gap widens B) Gap declines C) Gap does not change D) We do not have enough information to answer this question
All other things constant, the entry of new firms into a labor intensive industry like carpet weaving is likely to: a. shift the market demand for labor curve to the right
b. make the market demand for labor curve steeper. c. shift the demand for labor curve for each carpet producer to the left. d. shift the market supply of labor curve to the left.