The market for reserves derives from the fact that:
A. desired reserves don't always equal actual reserves.
B. the Fed refuses to lend to banks.
C. reserves pay a relatively high return.
D. banks do not want excess reserves.
Answer: A
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Suppose the MPC is 0.8 in Canada and the MPC h is 0.55. If income increases by $100 million in Canada, then the increase in consumption of foreign goods will be:
a. $35 million. b. $25 million. c. $80 million. d. $100 million.
Which of the following is an example of a positional arms control agreement?
A. Highly selective admissions standards at colleges B. Public education C. Prohibiting speech that causes more harm than good D. Campaign spending limits
If the demand for new cars is elastic, an increase in price will result in:
A. an increase in profits. B. an increase in total revenue. C. a decrease in total revenue. D. an increase in the quantity demanded.
If a firm is able to produce ________ output even after reducing its labor workforce, this implies that the firm has excess labor.
A. more B. no C. the same amount of D. less