If the Fed buys bonds in the open market, the money supply decreases
a. True
b. False
Indicate whether the statement is true or false
False
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On a bank's balance sheet, bank capital is considered:
A) an asset B) a liability C) the difference between a firm's assets and it's shareholder's equity D) the total amount of funds banks have availability to make loans
The Fed increases reserves if it conducts open market
a. purchases or auctions term credit. b. purchases but not if it auctions term credit c. sales or auctions term credit d. sales but not if it auctions term credit
Consider an example of the prisoner's dilemma where 2 firms are making sealed bids on a contract and each firm is allowed to bid either $100 or $180. If both firms bid the same price, the job is shared equally and each firm earns half the value of its bid. Otherwise the lowest bidder wins the contract and receives the full value of its bid (and the other bidder earns zero). The non-cooperative outcome in this situation is
A) both firms bid $90. B) both firms bid $180. C) both firms bid $100. D) one firm bids $100, the other firm bids $180. E) both firms bid $50.
Macroeconomics deals with the analysis of all of the following questions except:
A. why do national economies grow. B. how does Microsoft price its software packages. C. how does a central bank influence inflation. D. why does a country experience recessions.