The discount rate is
a. the rate at which public banks lend to other public banks.
b. the rate at which the Fed lends to banks.
c. the percentage difference between the face value of a Treasury bond and what the Fed pays for it.
d. the percentage of deposits banks hold as excess reserves.
b
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Asymmetric information represents a market situation in which
A) all parties to a transaction possess less than full information. B) one party in a transaction has more information than the other party. C) some information possessed by the parties in a transaction may be false. D) a zero-sum game exists.
A situation in which firms choose their best strategy given the strategies chosen by the other firms in the market is called
a. a competitive equilibrium. b. an open-market solution. c. a socially-optimal solution. d. a Nash equilibrium.