A reverse repurchase agreement will accomplish all of the following to banks and other financial intermediaries EXCEPT:
A. discourage investment elsewhere.
B. ensure their solvency.
C. give them a higher rate of return on T-Bill holdings.
D. drain them of liquid cash.
Ans: B. ensure their solvency.
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The total of all planned real expenditures in the economy is called
A) aggregate consumption. B) aggregate demand. C) aggregate spending. D) aggregate GDP.
Which of the following actions should be discussed with an attorney before undertaking as the action could be considered legal?
A) an agreement with a customer about the markets in which the customer is allowed to resell the product B) an agreement with a competitor firm not to bid on a contract C) an agreement with a competitor firm submit a low bid on a contract D) an agreement with a competitor firm submit a high bid on a contract
The marginal benefit from pollution abatement
A) increases as pollution abatement increases because people learn to want an even cleaner environment as the environment gets cleaner. B) decreases as pollution abatement increases because of the law of diminishing marginal product. C) is constant as pollution abatement increases because pollution abatement is valued for its own sake and not for the utility it provides. D) decreases as pollution abatement increases because of the law of diminishing marginal utility.
If the intended aim of the price floor set in the graph shown was a net increase in the well-being of producers, then positive analysis would have us consider:
A. the policy to be effective if area C is larger than area E. B. the policy to be ineffective if area B is larger than area E. C. the policy to be ineffective if area E + B is larger than A + C + D + F. D. the policy to be effective if area E + B is larger than C + D + F.