Banks will hold additional excess reserves when
a. loans to customers look safe and interest rates are high.
b. they anticipate a bank audit.
c. loans to customers look risky and interest rates are low.
d. the economy is booming and there is a large demand for loans.
c
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Why do economists prefer to use the model of perfect competition in most economic analysis?
Iceland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Lavaland can produce 16 units of food per year or 8 units of clothing. Which of the following is true? a. Iceland has an absolute advantage, but not a comparative advantage in producing food. b. Iceland has a comparative advantage, but not an absolute advantage in producing food. c
Lavaland has both a comparative and absolute advantage in producing clothing. d. Lavaland has a comparative advantage, but not an absolute advantage in producing clothing.
The demand for reserves depends on income and the price level
a. True b. False Indicate whether the statement is true or false
Transfer payments are:
A. spending that transfers resources from the government to individuals. B. when individuals transfer stock ownership in lieu of payment with cash or other liquid assets. C. when individuals transfer cash for payments of a good or service. D. payments that individuals make to the government.