Which of the following is true?
a. If the Fed wants to increase the money supply, it should increase the interest rate it pays banks on their excess reserves.
b. When the Fed reduces the interest rate paid on excess reserves, it increases the incentive of commercial banks to hold excess reserves.
c. If the Fed wants to reduce the future growth rate of the money supply, it could do so by increasing the interest rate it pays banks on excess reserves.
d. When the Fed increases the interest rate it pays on excess reserves, this encourages banks to extend more loans and thereby increase the money supply.
C
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If a project has an initial investment of $20,000 and consecutive yearly cash inflows of $5,000, $8000, $10,000 and $7,000, respectively, what is its payback period?
A. 2 years B. 2.5 years C. 2.7 years D. 3 years
All evidence points to the fact that firms' market power within an industry and industry concentration ratios are
a. directly related, that is, firms' market power is high when concentration ratios are high b. inversely related, that is, firms' market power is low when concentration ratios are high c. totally unrelated, that is, they are directly related in some industries and indirectly related in others d. only moderately related, depending on the degree of competition in the industry e. low for monopoly and high for perfect competition
If the consumer's budget constraint is given by 10F + 5S = 100 where F is food and S is shelter, what is the opportunity cost of food in terms of shelter?
A. 2 B. 10 C. 15 D. 5