Ordinary commercial banks can expand the supply of money by
a. printing up currency when they need it.
b. buying and selling government bonds to the general public.
c. using a portion of their deposits to extend additional loans.
d. reducing their vault cash and increasing their deposits with the Fed.
C
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In New York City, Mayor Michael Bloomberg has recently recommend that the city, with the help of private donors, make cash payments to poor and underprivileged parents who can certify that their children are attending school on a regular basis
The payments would start after third grade and go through high school, rising each year as dropout rates get higher and a child's forgone earning potential is higher. What economic concept does this policy represent? A) public goods B) technological progress C) externalities D) the "invisible hand" E) incentives
A small business owner has a line of credit from a bank with a nominal interest rate of seven percent
For several years, the price level has been rising at an annual rate of two percent, but the owner has just read in the newspaper that economists expect next year's inflation rate to be four percent or more. Assume that this owner may either continue the line of credit at seven percent, or renegotiate to alter both the size of the credit and the interest rate. What reason might there be for the owner to keep the credit terms as is? What argument might justify changing the credit agreement?
When prices of products are set below equilibrium,
A. society’s resources are inefficiently allocated. B. firms expand output to increase profits. C. firms earn excessively high profits. D. consumers benefit from surpluses of cheap goods.
Think totals: In a perfectly competitive labor market, the total labor cost curve, TLC
a. is upward sloping, and the marginal labor cost curve, MLC, is downward sloping b. is downward sloping, and the marginal labor cost curve, MLC, is upward sloping c. and the marginal labor cost curve, MLC, are both horizontal curves d. is horizontal and the marginal labor cost curve, MLC, is upward sloping e. is upward sloping, and the marginal labor cost curve, MLC, is horizontal