If banks are currently holding zero excess reserves and the Fed raises the required reserve ratio, which of the following will happen?
A) Banks will have a reserve deficiency.
B) Banks will have positive excess reserves.
C) Banks will begin to extend more loans.
D) Banks will begin to extend more credit.
E) b and d
A
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A cost due to an increase in activity is called
A) an incentive loss. B) a marginal cost. C) a negative marginal benefit. D) the total cost.
Refer to Table 17-2. The marginal revenue product of labor from the third unit of labor is
A) $5,460. B) $1,560. C) $1,260. D) $780.
When banks borrow money from the Federal Reserve, these funds are called
A) federal funds. B) discount loans. C) federal loans. D) Treasury funds.
If a nation specializes in activities in which opportunity costs are the lowest and then trades with other nations, it is most likely to:
a. have a higher standard of living for its citizens than it would if it did not specialize and then trade. b. have a lower standard of living for its citizens than it would if it did not specialize and then trade. c. create as much wealth for its citizens as it could if it did not specialize and then trade. d. benefit in the short run but incur heavy loss in the long run. e. incur heavy loss in the short run and eventually cease production in the long run.