The reserves of financial institutions:
a. Are the largest liability in a financial institution's balance sheet.
b. Are assets that financial institutions try to maximize.
c. Are assets that financial institution's try to keep at the legal limit.
d. Are made up mainly of government securities and high quality corporate bonds.
e. Include the liability called "Borrowing from the central bank."
.C
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Which of the following is an example of an automatic stabilizer during a recession?
A) A decrease in tax revenue due to an increase in unemployment B) An increase in money supply due to a decrease in bank deposits C) An increase in interest rates due to a decrease in investment D) A decrease in inflation due to an increase in consumption
Which of the following is a major implication of the invisible hand concept?
a. Government-operated firms tend to have lower costs than private sector firms. b. When directed by competitive market prices, the actions of self-interested individuals will tend to promote overall economic prosperity. c. Prosperity cannot be achieved unless the selfish nature of people can be changed. d. Competition is harmful to the health of an economy because it results in wasteful duplication.