When a commercial bank borrows from a Federal Reserve Bank:
A. the supply of money automatically increases.
B. it indicates that the commercial bank is unsound financially.
C. the commercial bank's lending ability is increased.
D. the commercial bank's reserves are reduced.
C. the commercial bank's lending ability is increased.
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Suppose the price of a tie rises from $45 to $55. Using the midpoint method, what is the percentage change in price?
A) 10 percent B) -10 percent C) 20 percent D) -20 percent E) 100 percent
The Federal Reserve fears that the United States economy is growing too slowly and is stuck in a recession. To move the economy back to its potential GDP, the most likely policy action for the Fed is to ________ the federal funds and thus ________
A) raise; increase aggregate demand B) raise; decrease aggregate demand C) lower; increase aggregate supply D) lower; decrease aggregate supply E) lower; increase aggregate demand
Everything else held constant, if aggregate output is to the ________ of the LM curve, then there is an excess demand of money which will cause the interest rate to ________
A) right; fall B) right; rise C) left; fall D) left; rise
If a country imposes a tariff on some good, then which of the following curves shifts right?
a. both the demand for loanable funds and demand in the market for foreign-currency exchange. b. the demand for loanable funds and demand in the market for foreign-currency exchange. c. demand in the market for foreign-currency exchange but not the demand for loanable funds. d. neither the demand for loanable funds nor demand in the market for foreign-currency exchange.