Required reserves:
A. Must be held at the regional Fed bank.
B. Represent the dollars that a bank can lend.
C. Are the minimum amount of reserves a bank is required to hold.
D. Are equal to total reserves minus expected reserves.
C. Are the minimum amount of reserves a bank is required to hold.
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It is conventional to divide the nation's total production into four categories. Name and explain the four categories. In the United States, which category accounts for the largest share and the smallest share of the nation's total production?
What will be an ideal response?
If a professor gives up her job to open a shoe store, which of the following costs would an accountant tend to ignore?
A) The $1,500 per month lease for the shoe store. B) The $150 per month electricity bill. C) The $4,000 per month of income forgone by not being employed as a professor. D) The $200 business license, which, of course, is a sunk cost.
In order for a central planner to achieve the invisible-hand type efficiency of a free market, the planner would
A. need masses of statistics. B. be required to makes enormous calculations. C. need to be able to measure a consumer’s marginal utility in order to equate MU with MC. D. All of the above would be required.
Homer earns $10,000 per year. Each year he spends $5,000 and saves $5,000. He pays a 5 percent sales tax on all of his spending. Assuming the sales tax is the only tax he pays, his average tax rate out of his income is
A. 3.5 percent. B. 2.5 percent. C. 0 percent. D. 5.0 percent.