Holding $10 in your pocket to purchase a piping hot pizza illustrates the
A) speculative demand for money.
B) transfer demand for money.
C) precautionary demand for money.
D) transactions demand for money.
Ans: D) transactions demand for money.
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The Fed buys securities and gives a bond dealer a check for the amount. After the check has cleared
A) reserves remain unchanged because the increase of reserves at the dealer's bank are offset by an increase in reserves at the Fed. B) reserves have risen by the amount of the check because the Fed clears the check by increasing the amount of the bank's deposits with the Fed. C) reserves have fallen by the amount of the check because the Fed clears the check by reducing the bank's deposits at the Fed. D) reserves have fallen by the amount of the reserves times the reserve ratio and the money supply increases by the difference between the amount of the check and the increase in the reserves.
Differentiate between perfectly elastic supply and perfectly inelastic supply. When the price of a good is $100, 50 units are supplied. When the price increases to $300, 250 units are supplied. Calculate the price elasticity of supply of the good
What will be an ideal response?
Loans made to customers are a liability on a bank's balance sheet.
Answer the following statement true (T) or false (F)
The technology associated with manufacturing computers has advanced enormously. This change has led to the price of a computer ________ and the quantity ________
A) rising; increasing B) rising; decreasing C) falling; increasing D) falling; decreasing E) falling; not changing