Table 14.1Monetary Aggregates of the U.S. Financial SystemItemAmountCash held by public$250 billionTransactions deposits$1,000 billionRequired reserves$150 billionExcess reserves$0 billionU.S. bonds held by public$1,000 billionAssume an original balance sheet: The level of total reserves in Table 14.1 is
A. $1,150 billion.
B. $400 billion.
C. $150 billion.
D. $250 billion.
Answer: C
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What will be an ideal response?
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When we say supply curves become more elastic over time, we mean
A) the quantity supplied becomes independent of demand. B) any price change has a larger affect on quantity supplied. C) the supply curve becomes steeper. D) the supply curve shifts upward.
When property rights are assigned and transactions costs are low
A) all costs and benefits are taken into account by the transacting parties so the transaction is efficient. B) externalities will lead to market failure. C) the marginal social benefit curve shifts leftward. D) the marginal social cost curve shifts rightward.