Regional Fed banks are responsible for all of the following except
A. Holding bank reserves.
B. Providing loans to private banks.
C. Providing currency for private banks.
D. Cashing checks for large nonfinancial corporations.
Answer: D
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Raising the tax rate lowers the tax-adjusted MPC
Indicate whether the statement is true or false
Opportunity costs differ among nations primarily because
a. nations employ different currencies. b. nations have different endowments of land, labor skills, capital, and technology. c. nations have different political institutions. d. work-leisure preferences vary considerably from one nation to another.
A busy coffee shop hires an additional barista, enabling them to serve customers nearly twice as fast. The shop responds by hiring two more baristas. After this second round of hiring, the cost of serving each customer increases. What might explain this rise?
a. Diminishing returns of labor have set in. b. The company is experiencing economies of scale. c. Fixed costs are being spread over larger output. d. Total revenues have surpassed accounting costs.
Critics of supply-side economics agree that shortly after the Reagan tax cuts were put into place, the economy began to expand. These critics, though, argue that the expansion did not result from the supply-side policies, but rather from
A. the fact that the Federal Reserve dramatically increased the money supply at the same time that the tax cuts became effective. B. a very large increase in the demand for U.S. exports at the same time that U.S. imports fell dramatically. C. the self-correcting nature of the economy. D. the increases in government spending that occurred at the same time the tax cuts became effective.