The monetary base is equal to
A. M2 minus M1.
B. banks' reserves plus currency held by the nonbank public.
C. banks' reserves plus their holdings of Treasury securities.
D. banks' reserves plus fed funds.
Answer: B
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The sale of government securities by the Fed leads to
A) a decrease in bank reserves. B) a contraction in bank lending. C) a decrease in the monetary base. D) All of the above answers are correct.
As a result of financial deregulation
A) the IS curve became flatter and the LM curve became steeper, with the result that the interest rate became more volatile. B) the IS curve became steeper and the LM curve became flatter, with the result that the interest rate became more volatile. C) both the IS curve and the LM curve became steeper, with the result that the interest rate became more volatile. D) both the IS curve and the LM curve became flatter, with the result that the interest rate became more volatile.
Real estate markets tend to be highly segmented due to the heterogeneous nature of the products. Which of the following examples depicts this issue of market segmentation?
A. A couple searching for a single-family detached unit is willing to consider other residential property types such as an attached townhouse unit or condominium. B. A couple searching for a single-family detached unit has limited their search to homes in a single elementary school district C. A couple searching for a single-family detached unit has set a timeline for their search of 6 months, at which point they will renew their current apartment lease. D. A couple searching for a single-family detached unit has limited their search to be in a specific price range between $350,000 and $400,000.
The profit-maximizing quantity of the monopolist compared to the perfectly competitive industry in the above figure are, respectively
A. Q1 and Q5. B. Q1 and Q3. C. Q1 and Q2. D. Q2 and Q3.