During a banking panic, c ________, e ________, and the money supply ________
A) rises, rises, falls
B) rises, falls, is unaffected
C) falls, falls, is unaffected
D) falls, rises, rises
E) falls, falls, falls
A
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A change in the reserve requirement is the tool used least often by the Fed because it:
A. Does not affect bank reserves. B. Can cause abrupt changes in the money supply. C. Does not affect the money multiplier. D. Has no impact on the lending capacity of the banking system.
Refer to the scenario above. Which of the following will happen if the equilibrium price charged by the firm in the short run is $130?
A) The firm will earn positive economic profits and continue production. B) The firm will incur a loss but continue production. C) New firms will enter the industry in the long run. D) All firms will incur losses in the long run.