If you were the Chairman of the Fed and faced inflation, you would most likely
a. encourage commercial banks to provide loans by buying government securities
b. encourage commercial banks to provide loans by raising the discount rate
c. encourage commercial banks to provide loans by selling government securities
d. restrict commercial bank lending by selling government securities
e. restrict commercial bank lending by lowering the federal funds rate
D
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A firm's marginal revenue is
A) the change in total revenue that results from a one-unit increase in the quantity sold. B) total revenue minus total cost. C) the change in total revenue minus the change in total cost. D) the change in total revenue that results from an increase in the demand for the good or service. E) less than the market price for a perfectly competitive firm.
Banks face liquidity risk because
A) they can have difficulty meeting their depositor's demands to withdraw money. B) they are unable to borrow from the Federal Reserve. C) households and businesses may seek to borrow a large amount of funds in a short period of time. D) governments tend to run high budget deficits.
Reduction in quantity demanded of a good when its price increases because of a consumer's decreased purchasing power is termed as: a. income effect
b. substitution effect. c. utility effect. d. marginal effect.
The cost disease of services explains the problems surrounding the health-care crisis.
Answer the following statement true (T) or false (F)