In general, banks would prefer to acquire funds quickly by ________ rather than ________
A) reducing loans; selling securities
B) reducing loans; borrowing from the Fed
C) borrowing from the Fed; reducing loans
D) "calling in" loans; selling securities
C
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Which of the following is associated with a contractionary monetary policy?
A) raising bond prices B) selling bonds C) lowering the required reserve ratio D) lowering the differential between the discount rate and the federal funds rate
The fraudulent delivery of low quality experience goods at high prices is more likely if
a. interest rates decline b. information about notorious firms is speedily disseminated c. price premiums for allegedly high quality increase d. sellers invest in non-transferable reputation e. none of the above
The liquidity trap illustrated in Figure 15.5 is the result of a
A. Currency that is not serving its function as a store of value. B. Low opportunity cost of money. C. Low demand for cash at low interest rates. D. Fed ceiling on interest rates.
How does the text distinguish between the market and government?
A) The market is based on competition; the government is based on cooperation. B) The market is based on prices; the government is based on policies. C) The market is based on individualism; the government is based on socialism. D) In all of the above ways. E) In none of the above ways.