The name given to the fraction of deposits that a bank is legally required to hold in its vault, or as deposits at the Fed, is __________.
A. Assets
B. Assets + a bank's liabilities
C. Capital
D. Required reserves
Answer: D. Required reserves
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By failing to expand output to the point where marginal benefit equals market price, firms with market power produce less of the good and charge a higher price than would be socially optimal
Indicate whether the statement is true or false
Which of the following correctly expresses the relationship between the marginal utilities of two goods and marginal rate of substitution between the goods?
A. MRSXY = (MUY/MUX) B. MRSXY = (MUX/MUY) C. MRSXY = (U/?X) D. MRSXY = (U/?Y)
A surplus will occur if a ________ is set ________ the equilibrium price.
A. price ceiling; above B. price floor; below C. price floor; above D. price ceiling; below
The economic way of thinking assumes individuals
A) are irrational. B) are only concerned with "number one" (i.e., themselves). C) try to advance their own projects. D) cannot possibly behave in the interests of others.