Why did banks increase their holdings of excess reserves during the Financial Crisis of 2007-2009?
What will be an ideal response?
Given the historically high level of uncertainty in the financial system, many banks wanted to increase their liquidity. Also, the Fed started to pay interest on excess reserves.
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One possible way of achieving faster economic growth is to
A) abolish the system of patents and copyrights so that everyone can use people's ideas. B) limit international trade to only a few countries so that the nation is not hurt by too much trade. C) encourage research and development. D) limit schooling in order to have more people in the labor force, producing goods and services. E) promote tax saving so that people spend more and businesses' profits are larger.
Fill in the blank: Your textbook authors wrote, "A law that restricts competitors ________ competition."
A) preserves B) restricts C) promotes D) repairs
You have a bond that pays $60 per year in coupon payments. Which of the following would result in an increase in the price of your bond?
A) The price of a share of stock in the company falls. B) Coupon payments on newly-issued bonds fall to $50 per year. C) Coupon payments on newly-issued bonds rise to $80 per year. D) The likelihood that the firm issuing your bond will default on debt increases.
If three paper product companies are in an agreement, this is an example of a ________ agreement.
A) leftward B) horizontal C) rightward D) vertical