The interest rate that commercial banks charge each other for loans of reserves to meet their minimum reserve requirements is called:
A) treasury bill rate.
B) federal funds rate.
C) prime interest rate.
D) none of the above.
B
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Referring to the table above, if consumption in period one is $20,000, then consumption in period two cannot be greater than ________
A) $52,800 B) $50,400 C) $49,600 D) $50,000
A sudden rise in the market demand in a competitive industry leads to
a. A market equilibrium price higher than the original equilibrium in the short-run b. A market equilibrium price equal to the original equilibrium in the long-run c. Both a and b d. None of the above
Income assistance benefits are
a. taxed at a high marginal rate, in the sense that benefits sharply decrease as earned income increases b. taxed at a 20 percent marginal rate c. taxed at a high marginal rate in order to provide work incentives d. unaffected by increases in earned income e. positively related to income from other sources
Suppose the central bank reduces the money supply. This monetary contraction will always cause a greater reduction in output when it is accompanied by
A) an increase in expected future taxes. B) an increase in expected future interest rates. C) a reduction in expected future output. D) all of the above E) none of the above