When reserve requirements are increased, the:
A. excess reserves of commercial banks will decrease.
B. excess reserves of commercial banks will increase.
C. U.S. Treasury will have to borrow additional funds.
D. money supply will rise.
Answer: A
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Firm A and Firm B are the only two producers of a new solar powered cell. Society will gain the most when both firms decide to: a. form a cartel
b. merge. c. differentiate their products. d. produce at the downward-sloping part of their respective average total cost curves.
Which of the following is an example of an adverse supply shock?
A) a nationwide drought lasting for many months B) an outbreak of war among several of the Middle Eastern oil-producing countries C) an influenza virus that affects 50 percent of the labor force over a two month period D) a, b, and c E) a and c
An excess demand for domestic currency at current exchange rates is known as a
A. Balance-of-payments surplus. B. Trade surplus. C. Trade deficit. D. Balance-of-payments deficit.
Consider an unregulated monopoly in Figure 8.13. Suppose that a second firm enters the market. As a result, if a natural monopoly is inevitable in this market:
A. the demand curve facing each firm lies entirely above the long-run average cost curve. B. the demand curve facing each firm lies entirely below the long-run average cost curve. C. the demand curve facing each firm touches the long-run average cost curve at one point. D. None of these