The supply-of-money curve is almost perfectly inelastic because:
a. as interest rates rise, people will want to be supplied with more loans
b. the Fed makes more money available in response to higher interest rates.
c. banks generally find loans more profitable than keeping their assets as cash in their vaults or reserve deposits at the Fed, whether interest rates are 4% or 10%.
d. the Fed lowers the discount rate as interest rates rise.
c
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The above figure shows the utility of wealth curve for a homeowner whose only possession is a $50,000 house. If there is a 20 percent chance that the home could be entirely destroyed, what is the person's expected wealth?
A) $10,000 B) $20,000 C) $30,000 D) $40,000
When a multinational affiliate replicates production in a foreign country it is called ________ foreign direct investment
A) horizontal B) vertical C) transitional D) bisectional E) direct
Which of the following is one of the convergence criteria that countries needed to satisfy to join the Eurozone?
A) 10 consecutive years in the ERM band without devaluation of its currency B) a government deficit of no more than 25% of GDP in the previous year C) total government debt of no more than 60% of GDP in the previous year D) an inflation rate of 0% in the previous 10 consecutive years
The elasticity of labor supply:
A. for a town should equal the elasticity of labor supply for a state. B. should be greater for a state than for a town because people can travel more easily between states than between towns. C. should be greater for a town than for a state because people are more likely to consider work in a neighboring town than in another state. D. for a town is not related to the elasticity of labor supply for a state.