Assume that there is a 25% reserve requirement and that the Federal Reserve buys $200 million worth of government securities. If the securities are purchased from the public, then this action has the potential to increase bank lending by a maximum of ________.
A. $800 million, and also by $800 million if the securities are purchased directly from commercial banks
B. $600 million, and also by $600 million if the securities are purchased directly from commercial banks
C. $800 million, but only by $600 million if the securities are purchased directly from commercial banks
D. $600 million, but by $800 million if the securities are purchased directly from commercial banks
Answer: D
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An increase in the price of off-road vehicles will result in
A) a decrease in the supply of off-road vehicles. B) a larger quantity of off-road vehicles supplied. C) an increase in the demand for off-road vehicles. D) a smaller quantity of off-road vehicles supplied.
In the United States, the federal income tax is an example of a
A) progressive tax. B) regressive tax. C) flat tax. D) proportional tax.
Net Present Value measures the
a. total value of profits over the life of an investment b. discounted value of profits over the life of an investment c. discounted value of revenues over the life of an investment d. interest rate paid on funds borrowed for an investment e. none of the above
An example of a public policy response to a monopoly is:
A. antitrust laws. B. public ownership. C. doing nothing. D. All of these are examples.