Monopolies and oligopolies are similar in that both owe their existence to government intervention in the marketplace
Indicate whether the statement is true or false
F
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Which of the following is NOT held as an asset by banks?
A) securities B) loans C) reserves D) currency in the banks' vaults E) checkable deposits
Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 10 percent. If the Federal Reserve reduces the required reserve ratio to 4 percent, then the bank can make a maximum loan of
A) $0. B) $4 million. C) $6 million. D) $10 million.
An increase in expected inflation results in
A) lower nominal interest rates and higher bond prices. B) lower real interest rates and higher bond prices. C) higher real interest rates and lower bond prices. D) higher nominal interest rates and lower bond prices.
Suppose the demand for gourmet coffee can be represented by a linear demand curve. At the prevailing market price the income elasticity of demand for gourmet coffee is 2. When income rises the demand curve for gourmet coffee:
A) becomes less elastic at every price. B) becomes less elastic at the price that prevailed before the change in income C) becomes more elastic at every price D) becomes more elastic at the price that prevailed before the change in income