(Consider This) During and immediately following the severe recession of 2007-2009, commercial bank reserves held on deposit in Federal Reserve Banks:
A. rose to a high of 50 percent of total checkable deposits held by banks.
B. fell significantly as commercial banks withdrew reserves to pay off heavy debt obligations.
C. increased significantly because of Fed purchases of securities from commercial banks and the paying of interest on bank reserves.
D. increased significantly because the Fed increased the required reserve ratio.
Answer: C. increased significantly because of Fed purchases of securities from commercial banks and the paying of interest on bank reserves.
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Any factor that shifts the supply curve inward and to the left and does not affect the demand curve will raise the equilibrium price and reduce the equilibrium quantity.
Answer the following statement true (T) or false (F)
Gross income net of taxes is known as ________
A) Gross Domestic Product, or GDP B) disposable income C) Gross Domestic Product per capita D) retained earnings
When a firm has maximized profits
A) it has also minimized total costs. B) the marginal product of each input is also maximized. C) the marginal physical product is greater than the input price for all inputs. D) its marginal cost is zero.
The Bretton Woods Conference:
a. established a system of fixed exchange rates. b. established a system of flexible exchange rates. c. established a dirty float exchange rate system. d. did none of the above.