The primary function of the reserve requirements imposed by the Fed upon commercial banks is to
A) assure that Federal Reserve Banks will receive deposits with which they can purchase income-earning assets.
B) enable the government to borrow in emergencies.
C) protect the liquidity of the banking and monetary system.
D) protect the solvency of the commercial banking system.
E) serve as a control lever for central banking authorities.
E
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Suppose 100 citizens each derive marginal benefit from submarines according to the function MB = 10 - Q. If subs cost $100 each to produce, what is the efficient quantity of submarines?
What will be an ideal response?
An increase in the marginal rate of return on bread-mixing machines would
a. reduce the supply of loanable funds and reduce the equilibrium market interest rate b. reduce the supply of loanable funds and increase the equilibrium market interest rate c. increase the supply of loanable funds and reduce the equilibrium market interest rate d. increase the supply of loanable funds and increase the equilibrium market interest rate e. increase the demand for loanable funds and increase the equilibrium market interest rate