If the Fed lowers the reserve requirement, then this
A) decreases excess reserves, causes banks to reduce their loans, and decreases the money supply.
B) increases excess reserves, encourages banks to make more loans, and increases the money supply.
C) decreases excess reserves, causes banks to reduce their loans, and increases the money supply.
D) increases excess reserves, causes banks to reduce their loans, and increases the money supply.
B
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Refer to the figure above. What is the price that the monopolistic firm would charge?
A) $0 B) $3 C) $6 D) $9
Securities markets perform a valuable economic function because they provide
A. an opportunity for investors to make money in a short time. B. the principal indicator of the performance of the U.S. economy. C. an easy way to transfer corporate securities, thereby reducing risk to investors. D. assurance that stock purchasers can get back the purchase price of their stock.
The city of Austin can buy roads or light rail. If 10 miles of roads cost $1 million and 2 miles of light rail cost $10 million, what is the city's opportunity cost of 1000 miles of roads?
a. $100 million b. 2 miles of light rail c. 200 miles of light rail d. $50 million e. $1,000 million
Which of the following Fed actions would increase the level of total bank reserves?
a. buying securities from individuals or businesses b. selling securities to commercial banks c. reducing reserve requirements d. raising the discount rate