If the required reserve ratio is 100 percent, could the Federal Reserve still change the money supply with open market operations? Explain whether they could or could not
What will be an ideal response?
The Federal Reserve could still change the money supply, because the initial purchase or sale of government securities would change checking account deposits. For instance, if the Fed purchases a $1,000 government bond from you and you deposit the funds in the bank, then checking account deposits and the money supply would go up $1,000. The simple deposit multiplier with a 100 percent required reserve ratio would equal one, not zero, so an increase in reserves still increases checking account deposits.
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Regulation that specifies that a firm's profits must be shared with its customers if the profit rises above a target level is called
A) rate of return regulation. B) minimum price regulation. C) earnings sharing regulation. D) average cost pricing.
A firm whose production function displays increasing returns to scale will have a total cost curve that is:
a. a straight line through the origin. b. a curve with a positive and continually decreasing slope. c. a curve with a positive and continually increasing slope. d. a curve with a negative and continually decreasing slope.