The cost of producing one more unit of a good is called marginal cost
a. True
b. False
Indicate whether the statement is true or false
True
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If the Fed buys government securities from commercial banks in the open market ________.
A. commercial banks give the securities to the Fed, and the Fed decreases the banks' reserves B. the Fed gives the securities to the commercial banks and decreases the banks' reserves C. commercial banks give the securities to the Fed, and the Fed increases the banks' reserves D. the Fed gives the securities to the commercial banks and increases the banks' reserves
The term "double coincidence of wants"
A. means that people are trying to purchase the same thing. B. is a situation where runaway prices are the result of printing too much money. C. describes a barter situation where individuals agree to trade commodities in amounts satisfactory to both parties. D. means that people with the same commodities agree to trade among themselves.
Financial intermediaries handle a larger flow of funds than do primary markets primarily because financial intermediaries:
A. can lower transaction costs and increase liquidity for savers. B. have government-regulated prices, so there is little competition. C. do not have to worry about information asymmetry. D. have a government-provided monopoly.
Which of the following institutions is responsible for supervising the banking system of the United States?
A. The Federal Reserve System B. The Open Market Committee C. The U.S. Treasury D. The Federal Deposit Insurance Corporation