Money in the United States today includes _______
A. currency and deposits at both banks and the Fed
B. the currency in people's wallets, stores' tills, and the bank deposits that people and businesses own
C. currency in ATMs and people's bank deposits
D. the banks' reserves and bank deposits owned by individuals and businesses
B Only currency outside of banks is part of money.
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In perfect competition, the
A) market demand for the good or service is large relative to the minimum efficient scale of a single producer. B) market demand for the good or service is small relative to the minimum efficient scale of a single producer. C) market demand for the good or service can be small relative to the minimum efficient scale of a single producer as long as the goods or services are not identical. D) size of the market demand for the good or service relative to the minimum efficient scale of a single producer does not affect competition.
Of the four effects on interest rates from an increase in the money supply, the initial effect is, generally, the
A) income effect. B) liquidity effect. C) price level effect. D) expected inflation effect.
Banks are exposed to interest rate risk primarily because
A) interest rates are very difficult to forecast. B) the maturities of banks' assets and liabilities differ. C) borrowers from banks are prone to default. D) depositors are always searching for a slightly higher interest rate.
A firm is holding excess labor. This will
A. decrease the productivity of capital. B. reduce labor productivity. C. increase the amount of capital employed. D. increase labor productivity.