One of the main functions of banks is
A. Maintaining a constant money supply.
B. Borrowing money and lending to savers.
C. Ownership of projects in which they invest.
D. Creating money.
Answer: D
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The transactions demand for money is the demand for money by households for:
a. rainy day spending. b. predictable spending purposes. c. liquidity purposes. d. investing purposes.
Which of the following would most likely lead to discrimination with landlords?
a. rent fluctuating around equilibrium price b. rent at equilibrium price c. rent above equilibrium price d. rent below equilibrium price
Which pair of goods is likely to have the largest positive cross-price elasticity?
A. Butter and margarine B. Ramen noodles and a Rolex watch C. Peanut butter and jelly D. Cross-price elasticity is always negative, and simply reported in absolute value.
The Fed engages in open market operations and sells government securities. The result is
A. lower interest rates. B. higher interest rates. C. interest rates remain unchanged since there is no reason to think bond prices changed. D. uncertain since more information is needed.