If your bank receives a demand deposit of $4,000 and the legal reserve requirement is 20 percent, then it can make additional loans of
a. $800
b. $3,200
c. $4,000
d. $16,000
e. $20,000
B
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The CPI market basket is determined by
A) tax return data of households. B) supermarket purchases recorded by scanner technology. C) profit releases of the largest companies. D) a consumer survey. E) surveys asking large retail companies, such as Wal-Mart, about their sales of consumer goods and services.
Interest rate parity holds well in the Eurocurrency market
Indicate whether the statement is true or false
A firm sells an identical product to two groups of consumers, A and B. The firm has decided that third-degree price discrimination is feasible and wishes to set prices that maximize profits
Which of the following best describes the price and output strategy that will maximize profits? A) PA = PB = MC. B) MRA = MRB. C) MRA = MRB = MC. D) (MRA - MRB) = (1 - MC).
Which of the following is a part of the sequence of events that links the change in the money supply by the Fed to investment demand?
a. An increase in the money supply lowers the interest rate, which in turn reduces the quantity of investment demanded. b. An increase in the money supply lowers the interest rate, which in turn increases the quantity of investment demanded. c. An increase in the money supply raises the interest rate, which in turn reduces the quantity of investment demanded. d. An increase in the money supply raises the interest rate, which in turn increases the quantity of investment demanded.