The reserves supply schedule has a positive slope because
A. the Fed lowers the discount rate as interest rates rise.
B. the Fed makes more money available at higher interest rates.
C. as interest rates rise, banks will find loans more profitable.
D. as interest rates rise, people will demand more loans.
Answer: C
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A monopoly can arise when
A) there are diseconomies of scale. B) there are barriers to entry and no close substitutes for the good being produced. C) a firm cannot price discriminate. D) firms engage in rent seeking. E) a firm must set MR equal to MC in order to maximize its profit.
According to economists, how does an increase in the inflation rate affect the consumption function?
a. It shifts the function upward. b. It shifts the function downward. c. It causes movement upward along the function. d. It causes movement downward along the function. e. It has no predictable effect on the function.