Which one of the following is a tool of monetary policy for altering the reserves of commercial banks?
a. Treasury deposits
b. Federal Reserve Notes
c. Reserve ratio
d. Budget surplus or budget deficit
c. Reserve ratio
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When discussing the private capital account, asset flows include all but which one of the following?
A) capital expenditures by domestic firms B) foreign securities purchased by domestic citizens C) changes in the balances of a bank's cash deposit from foreign transactions D) an investment in a foreign subsidiary by a domestic firm
Three individuals consume a public good, and their demands are expressed as:
P1 = 1.5 - 0.005Q (for Q < 300 ); P2 = 4.5 - 0.007Q (for Q < 643 ); P3 = 3.0 - 0.002Q (for Q < 1500 ), where P represents price in dollars per unit and Q represents output in units per day. The marginal cost of providing the service is given as a constant $5.00 per unit. Determine the efficient level of output of this public good.
Which of the following correctly describes the profit-maximizing level of output selected by a monopolistically competitive firm in the short run?
a. Output is set in the short run where marginal cost equals price. b. Output is set in the short run where marginal cost equals marginal revenue. c. Firms will shut down in the short run even if price exceeds average variable cost at the rate of output selected by the firm. d. Firms will shut down in the short run even if price equals marginal cost.
Typically, a bank's largest asset is its
A) reserves. B) holdings of securities. C) deposits of its customers. D) loans.