When commercial banks borrow reserves from the Fed, the quantity of reserves in the banking system ________ and, ultimately, the money supply ________.

A. decreases; increases
B. increases; increases
C. increases; decreases
D. decreases; decreases


Answer: B

Economics

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Money is

a. an asset that is widely accepted as a means of payment in the economy b. any asset that is convertible into cash c. an asset that is backed by a precious metal such as gold or silver d. any financial asset created and issued by government e. anything used to pay for goods and services, including currency, checks, and credit cards

Economics

If the CPI was 228 at the end of 2007 and 236 at the end of 2008, what was the inflation rate in 2008?

A) 236 percent B) 3.5 percent C) 8 percent D) 4 percent E) 3.4 percent

Economics

Suppose the tax amount on the first $10,000 income is $0; $2000 on the next $20,000; $4000 on the next $20,000; $6000 on the next $30,000; and 40 percent on any income over $80,000. Family A has income of $30,000 and Family B has income of $80,000. What is the marginal and average tax rate for each family?

A. Family A: marginal-10 percent; average-10 percent; Family B: marginal-40 percent; average-40 percent. B. Family A: marginal-10 percent; average-20 percent; Family B: marginal-30 percent; average-23 percent. C. Family A: marginal-10 percent; average-15 percent; Family B: marginal-40 percent; average-20 percent. D. Family A: marginal-10 percent; average-6.7 percent; Family B: marginal-20 percent; average-15 percent.

Economics