When the Fed lowers the legal reserve requirement, it
a. lowers the cost of borrowing from the Fed, allowing banks to make more loans
b. raises the cost of borrowing from the Fed, disallowing banks from making the same quantity of loans
c. increases the amount of excess reserves that banks hold, allowing them to make more loans
d. increases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans
e. decreases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans
C
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What are the rationales for protectionist policies?
What will be an ideal response?
A decrease in the quantity of money supplied shifts the money supply curve to the ________, and the equilibrium interest rate ________, everything else held constant
A) right; falls B) right; rises C) left; falls D) left; rises
Economic rent represents
a. a loss to society since resource owners do not earn it b. the difference between marginal revenue product and marginal resource cost c. a loss to resource owners who earn less than the market value of the resource d. any resource earnings less than that resource's opportunity cost e. any resource earnings greater than that resource's opportunity cost
Public choice analysis suggests that bureaucrats and public-sector managers have a strong incentive to
a. economize on their spending so more funds will be available for other government programs. b. ensure that their budget is exactly the size that would be considered economically efficient. c. expand their budgets to sizes beyond what would be considered economically efficient. d. keep individual legislators fully informed as to every expenditure.