A(n)__ price is the implicit price of an action whose value is measured in opportunity costs.
A. relative
B. guaranteed
C. equilibrium
D. shadow
Ans: D. shadow
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Assuming an decrease in money demand, then to keep interest rates constant the Fed must
a. keep the money supply constant. b. conduct an open market sale of bonds. c. reduce the required ratio. d. both b and c. e. None of the above
To cause the interest rate to fall, the Fed can
a. decrease the money supply b. stabilize the money supply to increase investor confidence c. decrease the price of bonds d. increase the money supply e. increase the demand for money
Banks serve the role of a financial intermediary; however, banks cannot survive in the long term if they are paying out more in ___________ to depositors than they are receiving from borrowers.
a. interest b. revenue c. taxes d. income
Abstraction ignores many details in order to focus on the most important elements of a problem.
Answer the following statement true (T) or false (F)