If the Fed lends to member banks, what happens to reserves and the money supply?
a. Reserves increase and the money supply decreases.
b. Both increase.
c. Reserves decrease and the money supply increases.
d. Both decrease.
B
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The Ricardian model attributes the gains from trade associated with the principle of comparative advantage result to
A) differences in technology. B) differences in preferences. C) differences in labor productivity. D) differences in resources. E) gravity relationships among countries.
Vertical contracts between manufacturers and retailers often aim to
a. Incentivize the retailers to undertake costly activities, which they otherwise may not realize the full benefits of on their own b. Reward the retailer for undertaking the risk inherent in introducing a new product c. Serve as a "signal" of the manufacturer's belief of the likely success of his product d. All of the above
Fiscal policy involves changes in _____
a. government spending b. the amount lent by banks c. the interest rate d. the capital markets
A company’s obligation to bondholders ______.
a. comes before its obligation to stockholders b. is largely symbolic and unenforceable c. comes after its obligation to preferred stockholders d. comes after its obligation to common stockholders