Refer to the scenario above. What is the difference between the future value of John's deposit and Wendy's deposit after one year?
A) $10
B) $40
C) $60
D) $100
C
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What happens to the money supply when the Fed sells government bonds?
A) The money supply tends to rise. B) The money supply tends to fall. C) Nothing. D) It's impossible to determine, because bonds aren't money.
What are the effects of a minimum wage set below the equilibrium wage?
What will be an ideal response?
When the Fed lowers the discount rate, it makes it
a. cheaper for banks to borrow from each other. b. cheaper for banks to obtain additional reserves by borrowing from the Fed. c. more difficult for banks to accept deposits. d. more difficult for banks to extend loans.
One of the essential functions a bank performs is that of
A. Participating in the stock market. B. Purchasing government bonds. C. Creating money by lending required reserves. D. Transferring money from savers to borrowers.