Which of the following is the source of funds for bank loans?
A) marketable securities
B) required reserves
C) excess reserves
D) bank capital
C
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A perfectly competitive firm is a price taker because
A) many other firms produce the same product. B) only one firm produces the product. C) many firms produce a slightly differentiated product. D) a few firms compete. E) it faces a vertical demand curve.
Roaring Lion Studios can produce DVDs at a constant marginal cost of $5 per disk, and the studio has just releasing the DVD for its latest hit film, Ernest Goes to the Hamptons
The retail price of the DVD is $25, and the elasticity of demand for this film is -2. Has the studio selected the profit-maximizing retail price for this DVD? A) Yes B) No, the retail price is too low C) No, the retail price is too high D) We do not have enough information to answer this question.
Which of the following would be most likely to increase transaction costs?
a. A new mall opens bringing together area merchants at one location. b. A city ordinance bans large superstores in order to protect small, local businesses. c. A canal is constructed, allowing ships to reduce travel time by 50 percent. d. A website quickly connects new students to people who are seeking roommates.
Which of the following is false?
A. The classical economists believed that the economy was basically stable. B. Keynes believed that full employment was a "rare occurrence". C. Keynes argued that the interest rate was the most important factor in determining the level of investment demand in an economy. D. The classical economists used the laws of supply and demand to prove the validity of Say's law.