The main reason that the Fed now requires banks to hold a certain fraction of their deposits in reserves is
A. because banks would otherwise attempt to keep all of their deposits on reserve.
B. to ensure the safety of the deposits.
C. because this allows the Fed to manipulate the money supply.
D. historical continuity.
C. because this allows the Fed to manipulate the money supply.
You might also like to view...
If India decides to enact environmental laws to reduce air pollution, what would be the effect on GDP?
A) GDP would decrease if the pollution controls reduce productivity by more than the cost of the controls. B) GDP would increase as the environmental costs of pollution were not included in the calculation of GDP. C) GDP would increase as the citizens of India were made happier as the air pollution was reduced. D) GDP would increase reflecting the fact that the air would be cleaner.
It is common to see convenience stores open 24 hours a day even though many times late at night or in the early hours of the morning there are very few customers. What can explain this seemingly odd behavior?
What will be an ideal response?
If firms are protected by substantial barriers to entry, short-run profits can turn into long-run profits
Indicate whether the statement is true or false
Jerry spends his entire income on two goods, Bran and Tea. Every month he spends half of his income on each of these goods. Jerry's income elasticity of demand for Bran is -.75. What is the income elasticity of demand for Tea?
A) 2.75 B) 0.36 C) -2.75 D) Unknown with the information provided