Which of the following statements is NOT true?
A. The supply of money decreases when the Federal Reserve Banks buy government securities from households or businesses.
B. Excess reserves are the amount by which actual reserves exceed required reserves.
C. Commercial banks increase the supply of money when they purchase government bonds from households or businesses.
D. Commercial bank reserves are an asset to commercial banks but a liability to the Federal Reserve Banks.
A. The supply of money decreases when the Federal Reserve Banks buy government securities from households or businesses.
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If the demand and supply curves are described by the following equations P = a - bQ and P = c + dQ, respectively, the equilibrium quantity is Q* = (a - c) / (b + d)
Indicate whether the statement is true or false
A rightward shift of a supply curve
a. represents a decrease in supply b. might be caused by an increase in demand c. might be caused by a price ceiling d. would cause an excess quantity supplied at the previous equilibrium price e. might be caused by a decrease in demand
Suppose that the U.S. imposes an import quota on lumber. The quota makes the real exchange rate of the U.S. dollar
a. appreciate but does not change the real interest rate in the United States. b. appreciate and the real interest rate in the United States increase. c. depreciate and the real interest rate in the United States decrease. d. depreciate but does not change the real interest rate in the United States.
A teenaged babysitter is similar to a firm in a perfectly competitive industry in that, for both
A) fixed costs are lower than variable costs. B) there are many other suppliers of similar goods or services. C) the implicit costs of production exceed the explicit costs of production. D) average costs of production do not change when their industry expands.