In 2008, the Fed utilized expansionary monetary policy, which was made
A. more effective as banks held more excess reserves.
B. less effective as banks held more excess reserves.
C. more effective as banks held less excess reserves.
D. less effective as banks held less excess reserves.
Answer: B
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The Fed's purchase of U.S. government securities constitutes
a. a restrictive policy because it lowers the amount of total reserves in the banking system. b. a restrictive policy because it lowers the amount of excess reserves in the banking system. c. an expansionary policy because it raises the amount of total reserves in the banking system. d. an expansionary policy because it lowers the amount of required reserves in the banking system.
Entry into a perfectly competitive industry to occurs whenever:
A. accounting profit is equal to zero. B. economic profit is equal to zero. C. accounting profit is greater than zero. D. economic profit is greater than zero.
Which of the following is NOT a characteristic of a perfectly competitive industry?
A) There is free entry and exit in the long run. B) The industry demand curve is downward sloping. C) Each firm produces the same homogeneous product. D) Economic profits must be positive in the short run.
An industry has a single firm, and is found to have violated antitrust laws. The government breaks its up into two firms that will share the market equally. The Herfindahl index for this industry would change from:
A. 100 to 50 B. 10000 to 2500 C. 100000 to 50000 D. 10000 to 5000