Traditionally, the Federal Reserve can give emergency loans only to:
A. Securities firms
B. Commercial banks
C. Investment banks
D. Manufacturing firms
B. Commercial banks
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Which of the following statements is true?
A) Optimization requires individuals to foresee the future perfectly. B) An optimizing individual need not consider the risks involved in various choices. C) An optimizing individual is also likely to exhibit rationality. D) The less information that is available, the easier it is to make optimal decisions.
After a hurricane in Florida knocked out the regional water supply for several days, the demand for bottled water increased sharply. In a market economy, how will this increase in demand affect the equilibrium price and quantity of bottled water?
a. Price will increase, and quantity will decrease. b. Price will decrease, and quantity will decrease. c. Price will decrease, and quantity will increase. d. Price will increase, and quantity will increase.
Consider baseball games and ballpark hotdogs. A significant increase in the price of baseball game tickets would tend to
A) increase the demand for ballpark hotdogs. B) decrease the demand for baseball game tickets. C) decrease the demand for ballpark hotdogs. D) increase the demand for baseball game tickets.
Doctors find that one aspirin per day reduces the risk of heart attacks. Demand for aspirin will
A) increase, so that equilibrium price and equilibrium quantity will increase. B) decrease, so that equilibrium price and equilibrium quantity will increase. C) increase, so that equilibrium price will decrease and equilibrium quantity will increase. D) increase, but the new equilibrium price and quantity are indeterminate.