Explain how a market helps determine which goods and services will be produced, how to produce them, and who gets them
What will be an ideal response?
A market promotes interaction between consumers and firms. This interaction will result in prices that influence the decisions of consumers and firms.
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Suppose that a bank begins with $500 million in deposits and $100 million in reserves and is just meeting its desired reserve ratio. Now suppose a decrease in the required reserve ratio lowers the desired reserve ratio to 10 percent
After the fall in the desired reserve ratio but before the bank makes any changes, the bank's excess reserves are A) 0. B) $400 million. C) $450 million. D) $50 million.
In the classical model, an increase in government spending shifts the
a. demand for loanable funds to the right. b. demand for loanable funds to the left. c. supply of loanable funds to the right. d. supply of loanable funds to the left.