A decrease in the reserve ratio increases the:
A. amount of actual reserves in the banking system.
B. amount of excess reserves in the banking system.
C. number of government securities held by the Federal Reserve Banks.
D. ratio of coins to paper currency in the economy.
B. amount of excess reserves in the banking system.
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You are trying to decide if you should take a vacation. Your cost-benefit analysis indicates that the benefits outweigh the costs. You should
A) take a vacation. B) not take a vacation. C) take a vacation only if you have enough cash saved up to pay for it up front. D) More information is needed to make this decision.
If firms have different costs and market demand only supports the quantity the incumbent produces, then the incumbent's threat to use limit pricing
A) is credible. B) is not credible. C) would be illegal. D) is unable to be determined with the information given.