A bank finds itself short of required reserves and therefore borrows from another commercial bank. The interest rate on this loan is
a. zero.
b. the prime rate.
c. the discount rate.
d. the federal funds rate.
e. the required reserve ratio.
D
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Suppose that you deposit $2,000 in your bank and the required reserve ratio is 10 percent. The maximum loan your bank can made as a direct result of your deposit is
A) $200. B) $1,800. C) $2,000. D) $20,000.
If the demand curve a monopolist faces is perfectly elastic, then the ratio of the firm's price to the marginal cost is
A) 0. B) 1. C) 2. D) None of the above—the answer cannot be determined.
An example of moral hazard is
a. people drive as carefully in icy conditions with antilock brakes as without b. people drive as safely with more airbags as without c. football players with safer helmets 'spear' with their heads more often when tackling d. people read the medicine warnings as carefully when self-medicating as with a doctor's prescription
The current demand for a good would decrease if
a. the price of a complementary good rose. b. the price of a substitute good rose. c. consumers suddenly believed the price of the good would be sharply higher in the future. d. consumer income increased.