A price floor that is set above the equilibrium price
A) causes suppliers to lower their prices.
B) is binding.
C) is non-binding.
D) creates a shortage.
B
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In February, 2010 the U.S. M1 money multiplier crashed to 0.786. Each $1 increase in the monetary base resulted in the quantity of money increasing by only $0.79. Where did the remaining $0.21 disappear?
A) Banks held part of the $0.21 as excess reserves. B) Banks loaned out the $0.21. C) Consumers held part of the $0.21 as currency. D) Both A and C are correct.
An investment project has an expected profit rate of 12 percent. The going rate of interest is 12 percent. Firm X would need to borrow money to carry out this project; firm Y would use its own funds. Which statement is true?
A. Firm X would undertake the project; Firm Y would not. B. Neither firm would undertake this project. C. Both firms would undertake this project. D. Firm Y would undertake the project; Firm X would not.
The Federal Reserve
a. is responsible for conducting the nation's monetary policy, and it plays a role in regulating banks. b. is responsible for conducing the nation's monetary policy, but it plays no role in regulating banks. c. is not responsible for conducting the nation's monetary policy, and it plays a role in regulating banks. d. is not responsible for conducing the nation's monetary policy, and it plays no role in regulating banks.
In which of the four oligopolistic markets below is there considerable price competition?
A. music production industry B. airline industry C. stent industry D. high-definition DVD industry