The primary reason commercial banks must keep required reserves on deposit at the Fed is to:
A. Add to the liquidity of the commercial bank
B. Allow the Fed to control the amount of bank lending
C. Protect the deposits in the commercial bank against losses
D. Ensure that depositors can withdraw their money if they wish to
B. Allow the Fed to control the amount of bank lending
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The law of increasing additional cost occurs when
A. resources are not perfectly adaptable for alternative uses. B. there are always shortages in some goods. C. technology is not used. D. there are always alternatives and it is costly to figure out which alternative is best.
If the opportunity costs of producing a good increase as more of that good is produced, the economy's production possibility frontier will be
A. a negatively sloped straight line. B. negatively sloped and "bowed inward" toward the origin. C. negatively sloped and "bowed outward" from the origin. D. a positively sloped straight line.
Since 1970, U.S. investment in other countries has
A. increased by more than foreign investment in the U.S. B. increased more than twenty-fold. C. increased by exactly the same as foreign investment in the U.S. D. increased by less than foreign investment in the U.S.
Refer to Figure 9-4. Suppose the government allows imports of leather footwear into the United States. The market price falls to $24. What area represents domestic producer surplus?
A) T + U B) V + W + X + Y C) W + X + Y D) V