Loans made in the federal funds market:
A. are made by the Federal Reserve System to the bank within 24 hours.
B. are unsecured loans.
C. are insured by the FDIc.
D. are highly collateralized.
Answer: B
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When there is a binding price floor
A) there is no equilibrium. B) the quantity demanded does not equal the quantity supplied. C) all potential producers are happy because they can sell the good at a higher price. D) the government is helping consumers at the expense of producers.
The price rationing mechanism of a freely functioning market leads to the most efficient use of resources because
A) all gains from mutually beneficial trade are captured. B) the Federal Trade Commission regulates the market. C) of the rise of the legislative apparatus that supports trade. D) the Justice Department monitors market activities.
The monopsonistic exploitation of labor refers to
A) the reduction in total output from monopoly in the product market. B) the union wage differential. C) workers being paid a wage less than their marginal revenue product. D) the reduction in employment resulting from union wage setting.
In response to the recession of 2008-2009, the Fed doubled its asset holdings from $925 billion at mid-year 2008 to more than $2 trillion by mid-year 2009 . This policy
a. reduced the reserves available to banks, leading to a larger money supply. b. reduced the reserves available to banks, causing the money supply to decline. c. increased the reserves available to banks, leading to a larger money supply. d. increased the reserves available to banks, causing the money supply to decline.