A bank wants to get rid of excess reserves by making loans because
a. it will be penalized if it does not get rid of the reserves
b. the reserves do not earn interest
c. it is afraid it will lose the excess reserves
d. firms will not borrow from a bank with excess reserves
e. the bank has too many liabilities
B
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Aggregate demand
A) decreases if expected future income rises. B) increases if the exchange rate rises. C) increases if government expenditures decrease. D) increases if the expected inflation rate increases. E) increases if aggregate supply increases.
Fill in the blank: a combination of two goods that lies beyond the production possibilities frontier ________
A) can be produced with the current set of resources B) cannot be produced with the current set of resources C) can never be produced with any set of resources D) can be produced but only if the producer becomes more greedy
There are two players in a game. At each round of the game, one player has to trust the other for a particular task. In the first round, Player 1 has to decide whether he will trust Player 2
If he does not trust Player 2, he will get one-third of the prize money, while Player 2 will get the rest of the prize money. If he trusts Player 2, Player 2 can either cooperate with him or defect. If Player 2 defects, Player 1 will earn $0, while Player 2 will get the entire prize money. If Player 2 cooperates, each of them will get half the prize money. What will the equilibrium outcome of this game be if Player 1 can impose a guilt penalty of two-thirds of the prize money and is known to be a vengeful player?
Rent controls often have adverse effects, including
A) too much housing in a community. B) deterioration in the quality of existing rental units. C) too much construction of new rental units in the community. D) income transfers from the poor to landlords.