The Federal Reserve responded to the 2008 financial crisis in several ways. Which of the following is one of the ways the Fed responded?
A) The Fed helped Citibank to acquire General Motors and Chrysler.
B) The Fed lowered the required reserve ratio on demand deposit accounts in order to increase the amount of bank reserves.
C) The Fed banned investment banks from obtaining discount loans.
D) The Fed lent investment banks Treasury securities in exchange for mortgage-backed securities.
D
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A firm that acquires a substitute product can try and reduce inter-product cannibalization by
a. Doing nothing b. Repositioning its product or the substitute so that they do not directly compete with each other c. Pricing each product at the same level d. Raising prices on the low-margin products
An increase in the demand for corn is more than offset by an increase in its supply. As a result the equilibrium price will:
A. Increase and the equilibrium quantity will decrease B. Increase and the equilibrium quantity will increase C. Decrease and the equilibrium quantity will decrease D. Decrease and the equilibrium quantity will increase
A bank with $200 million in transaction deposits keeps $20 million in cash in the bank vault, $10 million in deposits at the Fed, and $10 million in government securities in the bank vault. Its total reserves equal
A. $30 million. B. $235 million. C. $20 million. D. $200 million.
Answer the following statements true (T) or false (F)
1. In monopsony situations, a minimum wage might increase wage and employment levels. 2. Education is a form of human capital and it helps explain wage differentials. 3. Wage differentials are fully explained by differences in productivity and human capital among various workers. 4. There will be no principal-agent problem if a firm's owner (like a business consultant) does all the work of the firm.