Big Bucks Bank currently holds $20 million in excess reserves. If the Fed increases the rate of interest it pays on reserves held at the Fed, we would expect Big Bucks Bank to:
A. use those excess reserves to increase its lending.
B. not change its lending activity, as excess reserves are not eligible to receive interest paid
on reserve accounts.
C. move a portion of those excess reserves into its required reserve account.
D. hold more of those excess reserves in its reserve account at the Fed, reducing the amount
it is willing to lend.
D. hold more of those excess reserves in its reserve account at the Fed, reducing the amount
it is willing to lend.
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The cost-benefit analysis on the financial impact smokers have on society conducted by Vanderbilt professor Kip Viscusi concludes that
A) smokers provide a net public service to society. B) smokers are a financial drain on society. C) smokers contribute less to retirement and pension programs than they receive from those programs. D) smokers account for about 32 cents of net cost to everyone else in society for every pack of cigarettes smoked.
Discretionary fiscal policy is handicapped by
A) lawmaking time lags, induced taxes, and automatic stabilizers. B) lawmaking time lags, estimation of potential GDP, and economic forecasting. C) economic forecasting, lawmaking time lags, and induced taxes. D) automatic stabilizers, lawmaking time lags, and potential GDP estimation. E) automatic stabilizers, the multipliers, and potential GDP estimation.