If a bank has zero excess reserves and one of its creditworthy customers applies for a loan, the bank may be able to grant the loan if it can
A) apply some of its loan repayments to obtain the funds for the new loan.
B) obtain extra funds in the federal funds market.
C) obtain extra funds by borrowing from the Fed.
D) any of the above
E) b or c
D
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An increase in fixed costs will lower a firm's
a. total cost. b. output. c. prices. d. profit.
All of the following statements about the United States are true EXCEPT:
A) The largest imports are services like royalties, license fees, and financial services, and the largest exports are goods like crude oil, automobiles, and clothing. B) The United States is the world's largest international trader. C) The United States imports more than it exports. D) Services account for a larger portion of U.S. exports than U.S. imports. E) Imports are a larger percentage of total expenditure than exports are a percentage of total production.
Inflation can be started by
A) a decrease in aggregate supply or a decrease in aggregate demand. B) a decrease in aggregate supply or an increase in aggregate demand. C) an increase in aggregate supply or an increase in aggregate demand. D) an increase in aggregate supply or a decrease in aggregate demand. E) an increase in aggregate demand or an increase in potential GDP.
Cost-price pricing typically does not result in profit-maximization. As a result, economists have two views of cost-plus pricing. One of these views is
A) cost-plus pricing is a good way to approximate the profit-maximizing price when marginal revenue or marginal cost is difficult to determine. B) cost-plus pricing is more likely to lead to profit-maximization for monopolistically competitive firms than for oligopoly firms. C) cost-plus pricing is more likely to result in profit-maximization the more elastic the firm's demand curve is. D) cost-plus pricing is more likely to lead to profit-maximization for large firms than for small firms.