All else the same, when the Fed calls in a $100 discount loan previously extended to the First National Bank, reserves in the banking system
A) increase by $100.
B) increase by more than $100.
C) decrease by $100.
D) decrease by more than $100.
C
Economics
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If the substitution effect is stronger than the income effect, a decrease in real interest rates will ________ current consumption for households who are lenders and will ________ current consumption for households who are borrowers
A) increase; decrease B) decrease; increase C) increase; increase D) increase; have an unclear effect on
Economics
If people act as if they systematically pursue their own self-interest, then they will most likely
A) respond irrationally to any incentive. B) respond to a given incentive in a random manner. C) respond predictably to a given incentive. D) not respond to any incentive.
Economics