Everything else held constant, in the market for reserves, increases in the discount rate affect the federal funds rate
A) when the funds rate is below the discount rate.
B) when the funds rate equals the discount rate.
C) when the demand for federal funds intersects the vertical section of the reserve supply curve.
D) when the demand for federal funds equals zero.
B
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According to Keynes, the adoption of an expansionary fiscal policy will cause: a. both equilibrium price level and equilibrium output to rise
b. equilibrium price level to rise and equilibrium output to fall. c. equilibrium price level to fall and equilibrium output to rise. d. both equilibrium price level and equilibrium output to fall. e. equilibrium price level to remain the same and equilibrium output to fall.
Which of the following is a free rider?
a. Butch breeds the feared pit bulls, and his neighbors now erect fences around their property. b. Fred watches many public television programs, but he has never sent in a contribution. c. Barry steals candy from the store where he works. d. Betty regularly uses the local public library. e. Joe drives 20,000 miles a year on public streets, but he pays no more in taxes than Sam, who only drives 1,000 miles.
Jennifer lives in a home that was newly constructed in 2011 for which she paid $240,000 . In 2014 she sold the house for $260,000 . Which of the following statements is correct regarding the sale of the house?
a. The 2014 sale increased 2014 GDP by $260,000 and had no effect on 2011 GDP. b. The 2014 sale increased 2014 GDP by $20,000 and had no effect on 2011 GDP. c. The 2014 sale increased 2014 GDP by $260,000; furthermore, the 2014 sale caused 2011 GDP to be revised upward by $20,000. d. The 2014 sale affected neither 2014 GDP nor 2011 GDP.
A bank has $30,000 in deposits and has $5,400 in reserves. What is its reserve ratio?