Use the following figure for the federal funds market to answer the next question.
If the Fed supplies $200 billion in reserves, the equilibrium prime rate is ________.
A. 5.5%
B. 5.0%
C. 6.0%
D. Undeterminable with the information given.
Answer: D
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If the United States' unemployment rate is 10 percent and the capacity utilization rate is 70 percent, the economy is in the midst of a ____________.
Fill in the blank(s) with the appropriate word(s).
In the above figure, if the quantity is equal to 2,500,000 units, the deadweight loss is equal to
A) area B + area F. B) area D + area I. C) area C. D) area G + area H. E) None of the above answers is correct because the deadweight loss is equal to zero.
Which of the following statements is true?
A) Trade-offs do not apply when the consumers purchase a product for which there is excess supply, such as with a stock clearance sale. B) Economics is a social science that studies the trade-offs we are forced to make because resources are unlimited. C) Every individual, no matter how rich or poor, is faced with situations that require trade-offs. D) Any time you have to decide which action to take you are experiencing economic equity.
To achieve economic efficiency, a pure public good
a. would have to be provided at marginal cost b. would have to be provide at marginal revenue c. should never be provided d. should be provided to everyone e. would have to be provide free of charge