By raising or lowering the _______, the Fed changes the cost of money for banks, which impacts the incentive to borrow reserves.
A. Reserve ratio
B. Discount rate
C. Money multiplier
D. Yield
B. Discount rate
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When the Fed decreases the discount rate, it makes it easier for banks
a. to decrease their reserves by borrowing from the Fed, causing the money supply to shrink b. to increase their reserves by borrowing from the Fed, causing the money supply to grow c. to protect against the inevitable accompanying increase in the legal reserve requirement d. to convert its loans into deposits e. to write off its obligations to the Fed
An increase in the price of product B resulted in an increase in the demand for product C. This indicates that products B and C are:
a. Normal goods b. Complementary goods c. Inferior goods d. Substitute goods
Which of the following is an asset for a bank?
A) deposits of its customers B) short-term borrowing C) shareholders' equity D) loans
A monopolistically competitive firm influences market price by virtue of its size.
Answer the following statement true (T) or false (F)