When the Fed purchases government securities from a commercial bank, the bank:
a. automatically becomes poorer
b. loses equity in the Fed.
c. receives reserves that can be used to make additional loans.
d. loses its ability to make loans.
c
You might also like to view...
The opportunity cost of a firm using its own capital is
A) economic depreciation. B) self-ownership depreciation. C) economic loss. D) normal loss. E) capital loss.
In a perfectly competitive market in the short run, as the market demand increases, the firms ________ their output and their economic profit ________
A) increase; increases B) increase; decreases C) decrease; decreases D) decrease; increases
Capital per person k is higher in Japan than in the United States. As a result ________
A) per capita income is higher in Japan B) total factor productivity is higher in Japan C) the marginal product of capital is higher in Japan D) all of the above E) none of the above
The long-run response to an increase in the growth rate of the money supply is shown by shifting
a. the short-run and long-run Phillips curves left. b. the short-run and long-run Phillips curves right. c. only the short-run Phillips curve left. d. only the short-run Phillips curve right.