The rate of interest banks charge each other for lending reserves is the:
A. Federal funds rate.
B. Discount rate.
C. Money multiplier.
D. Excess reserve rate.
A. Federal funds rate.
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In the market for reserves, if the federal funds rate is between the discount rate and the interest rate paid on excess reserves, a ________ in the reserve requirement ________ the demand for reserves, raising the federal funds interest rate,
everything else held constant. A) rise; decreases B) rise; increases C) decline; increases D) decline; decreases
The phase of the business cycle that follows a recession is known as the:
A. peak. B. recession. C. recovery. D. trough.
Why is a sunk cost not part of the opportunity cost of a decision?
A. Sunk costs are a part of the opportunity cost of a decision. B. Because the expense would too often outweigh the benefits. C. Because the money is gone, regardless of the decision made. D. Because the chances of recouping it are infinitesimally small.
Which of the following will cause an increase market supply?
A. An increase in the price of the good. B. An increase in demand for the good. C. A technological innovation that lowers the marginal cost of producing the good. D. A decrease in the number of firms in the market.