A perfectly competitive market has
A) high barriers to entry or exit.
B) homogeneous products.
C) to do a lot of advertising to attract buyers.
D) few firms.
B
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Suppose the required reserve ratio is 0.1 and Linda deposits $4,000 in cash at the College State Bank. If the bank held no excess reserves before Linda's deposit and now increases its reserves by $500, which of the following is true? a. The bank must have lent out an additional $4,000. b. $500 is the value of the bank's required reserves
c. The bank now has excess reserves of $100. d. Both the bank's assets and its liabilities rise by $500. e. The bank now has $500 in excess reserves.
The aggregate supply curve reflects the relationship between the price:
a. of a particular good and the quantity supplied by all firms producing that good. b. of a particular good and the quantity supplied by the aggregate economy. c. level and the quantity supplied of all goods in the economy. d. level and the quantity of all goods purchased in the economy.
The federal funds rate is determined
A) by the Board of Governors. B) by the supply and demand for bank reserves. C) directly by households' and firms' demands for funds. D) by the federal government.
When the Fed buys federal government securities on the open market from commercial banks, over time, the:
A. assets of these banks fall. B. liabilities of the bank fall. C. assets of the banks rise. D. liabilities of the bank rise.