Which of the following explains why a bank holds reserves?
I. Banks are required by law to hold reserves.
II. To meet depositors' currency withdrawals
III. To use them to make loans to households
A) I only
B) II only
C) I and II
D) I, II, and III
E) I and III
C
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All else held constant, an increase in the price of tablets will result in a
A. decrease in the demand for tablets. B. leftward shift of the demand curve for tablets. C. movement up and to the left along the demand curve for tablets. D. rightward shift of the demand curve for tablets.
With asymmetric information among consumers and positive search costs c, all the other firms in the market are charging a monopoly price Pm. A firm may lower its price
A) by less than c to attract more buyers when there are many firms in the market. B) by more than c to attract more buyers when there are many firms in the market. C) by less than c to attract more buyers when there are few firms in the market. D) by more than c to attract more buyers when there are few firms in the market.
Which of the following groups believes that the economy can achieve full employment without inflation through tax reductions, lower resource prices, and deregulation?
a. Classical school. b. Keynesian school. c. Neo-Keynesian school. d. Rational expectations school. e. Supply-side school.
The quantity demanded of an input normally rises as its price rises
a. True b. False Indicate whether the statement is true or false