The Fed's power to set the required reserves of commercial banks:
A. provides a certain source of interest income for commercial banks.
B. allows the Fed to control the lending ability of commercial banks and, thereby, control the money supply.
C. prevents banks from hoarding too much vault cash.
D. prevents commercial banks from earning excess profits.
Answer: B
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The inflation tax falls mostly heavily on
a. those who hold a lot of currency and accounts for a large share of U.S. government revenue. b. those who hold a lot of currency but accounts for a small share of U.S. government revenue. c. those who hold little currency and accounts for a large share of U.S. government revenue. d. those who hold little currency but accounts for a small share of U.S. government revenue.
The lemons problem is due to
A) asymmetric information. B) moral hazard. C) hidden actions. D) symmetric information.
Consider an NBA superstar Kobe Bryant and one of your economics professors. Who is likely to receive more economic rent in his/her job? Explain your answer
What will be an ideal response?
For about the last 45 years, state and local taxes have remained relatively constant as a percentage of GDP
a. True b. False Indicate whether the statement is true or false