The assumed goal of the firms that operate in each of the four market structures discussed in the text is to maximize:
A) sales.
B) revenue.
C) profits.
D) price.
C
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Which of the following statements would appeal to someone who favors an expanded public sector as the basis of expansionary fiscal policy?
A. “The government isn’t the solution; it’s the problem.” B. “The government that governs least governs best.” C. “The American people want national defense; they want laws to be enforced; they want federal support for education and environmental protection, and they want transfer payments for the elderly and unemployed.” D. “If you ever got anything good out of the government you can be sure that some rich so-and-so got more.”
Suppose people become so convinced that interest rates cannot fall further that they hold money rather than bonds. This situation is
A. known as a liquidity trap B. shown by making the aggregate demand curve steeper C. shown as a leftward shift in the investment demand D. known as crowding out
Answer the following statements true (T) or false (F)
1. If member banks need to borrow reserves, they must do so through the discount window. 2. The discount rate at all Federal Reserve Banks is always identical. 3. The Federal Reserve System is completely independent of the government. 4. Raising the reserve requirement or the discount rate always decreases the money supply. 5. The Fed’s ability to influence the money supply through its open-market operations is independent of a commercial bank’s desire to make loans.
In commercial banking operations, there is a trade-off between liquidity and profitability
a. True
b. False
Indicate whether the statement is true or false