The quantity of reserves supplied increases as interest rates rise because
a. the Treasury borrows more at higher interest rates.
b. consumers don't want to borrow as much so more money is left in banks.
c. as interest rates rise, banks fear losses so they decrease lending.
d. banks find it more profitable to loan out excess reserves to other banks.
d
You might also like to view...
According to Tobin's q theory, when equity prices are low the market price of existing capital is ________ relative to new capital, so expenditure on fixed investment is ________
A) cheap; low B) dear; low C) cheap; high D) dear; high
Corporations that offer incentive pay schemes that link pay to meeting profit, production, or sales targets are doing so to cope with the
A) scarcity problem. B) inefficiencies usually found in large firms. C) principal-agent problem. D) problems of unionization.
A typical consumer consumes both coffee and donuts. After the consumer's income decreases, the consumer consumes more coffee but fewer donuts than before. For this consumer, coffee is a normal good, but donuts are an inferior good
a. True b. False Indicate whether the statement is true or false
On a production function, as capital per worker increases, output per worker
a. increases. This increase is larger at larger values of capital per worker. b. increases. This increase is smaller at larger values of capital per worker. c. decreases. This decrease is larger at larger value of capital per worker. d. decreases. This decrease is smaller at larger value of capital per worker.