Ceteris paribus, if the Fed raises the discount rate, then:
A. The money multiplier decreases.
B. The lending capacity of the banking system increases.
C. Excess reserves decrease.
D. The incentive to borrow reserves decreases.
D. The incentive to borrow reserves decreases.
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If firms in a duopoly can successfully collude
A) each firm can earn an economic profit. B) the industry, that is, both firms taken together, can earn the maximum economic profit. C) the firms achieve a cooperative equilibrium. D) All of the above answers are true.
The balance of payments is
A) a summary record of the financial transactions of a country's government with foreign governments. B) a summary record of a country's imports and exports of goods with foreign residents and governments. C) a summary record of a country's economic transactions with foreign residents and governments. D) a summary record of a country's purchases and sales of goods and services in the world market.
The higher the interest rate, the greater the preference for liquidity
a. True b. False Indicate whether the statement is true or false
A decrease in the price of milk will
a. increase the demand for milk. b. reduce the demand for milk. c. reduce the demand for orange juice, a substitute for milk. d. do both a and c