At any point in time, a single bank can loan an amount equal to
A) its excess reserves.
B) its required reserves.
C) its government securities.
D) the amount of loans the bank made in the past.
E) its total reserves.
A
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If the Federal Reserve announces that its target for the federal funds rate is rising from 4 percent to 4.25 percent, how do you expect workers and firms to react?
A) If the Fed's announcement is not credible, workers and firms will not expect inflation to fall so they will reduce their consumption and investment spending, which will increase aggregate demand and reduce inflation. B) As long as the Fed's announcement is credible, workers and firms will reduce their consumption and investment spending, which will reduce aggregate demand and reduce inflation. C) As long as the Fed's announcement is credible, workers and firms will increase their consumption and investment spending, which will increase aggregate demand and inflation. D) Workers and firms will incorporate the increase in interest rates into their expectations of inflation, and they will expect inflation to rise as a result of Fed's policy announcement.
Suppose an industry is composed of 10 firms. Each firm's share of total sales in the industry is 10 percent. If two of the firms merge, then the four-firm concentration ratio in the industry will
A) remain unchanged. B) decrease as there are fewer firms in the industry. C) increase. D) depend on the market condition faced by the industry.
Modern statistical methods have created a new branch of economics called
a. microeconomics b. macroeconomics c. econometrics d. abstract economics e. positive economics
When domestic assets in the United States decrease
A. the U.S. residents are reducing their debt to the rest of the world. B. the U.S. residents are increasing their stock of assets. C. there is no change in the U.S. debt to the rest of the world. D. the U.S. residents are increasing their debt to the rest of the world.