The interest rate affects the goods market through its impact on money demand.

When economists assume that people are rational and respond to incentives, they mean

A) people act with kindness. B) people act in their own self-interest. C) people are altruistic. D) people are selfish.

Which of the following statements regarding member banks is true?

A) A majority of banks are part of the Federal Reserve System as well as a majority of bank deposits. B) A minority of banks are part of the Federal Reserve System, but they have a majority of deposits. C) A majority of banks are part of the Federal Reserve System, but they have a minority of deposits. D) A minority of banks are part of the Federal Reserve System as well as a minority of deposits