Suppose that the Fed undertakes an open market sale, selling $1 million worth of securities to a bank. If the required reserve ratio is 8%, checkable deposits (or the money supply), would _______________ by ________________ million, assuming that there are no cash leakages and that banks hold zero excess reserves

In a perfectly competitive capital market, when the firm's marginal revenue product of capital exceeds the market interest rate, the

a. firm is maximizing profit b. firm should increase its quantity demanded of loanable funds c. firm should decrease its quantity demanded of loanable funds d. capital market is in equilibrium e. firm should reduce the rate of interest

Critics of advertising argue that advertising

a. creates demand for products that people otherwise do not want or need. b. lowers barriers to entry into an industry because new firms can more easily establish themselves as competitors. c. increases competition by providing information about prices. d. encourages monopolization of markets by raising entry barriers.