The Fed conducts an open market operation and buys $50,000 of government securities from Commerce Bank. The desired reserve ratio is 25 percent. What is the change in Commerce Bank's total reserves and its excess reserves?
What will be an ideal response?
When the Fed buys $50,000 of government securities from Commerce Bank, Commerce Bank's total reserves increase by $50,000. None of these reserves are desired reserves, so Commerce Bank's excess reserves also increase by $50,000.
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A project whose acceptance eliminates another project from consideration is called
A) independent. B) mutually exclusive. C) replacement. D) complementary.
Distinguish between a change in quantity supplied and a change in supply
What will be an ideal response?
Refer to the above figure. If the marginal cost curve for pollution abatement shifts to the right, everything considered, the
A) degree of air quality or cleanliness will also decrease. B) the degree of air quality or cleanliness will stay unchanged. C) the degree of air quality will improve. D) the marginal cost of pollution abatement has nothing to do with air quality.
In the indifference curve-budget line model of labor supply, the vertical intercept of the budget line represents
a. the worker's nonlabor income. b. the wage rate paid to the worker. c. the number of leisure hours enjoyed by the worker. d. the number of hours of labor that the worker supplies.