The non-bank public chooses among various financial assets in ...

[fnuegbu]

The non-bank public chooses among various financial assets in deciding what kind of liquidity it wants to hold. It thereby increases or decreases
 
  A) the narrowly-defined money stock (M1).
  B) the reserves of commercial banks.
  C) the reserves commercial banks are required to hold.
  D) all of the above, at least potentially.
  E) none of the above, since only the Fed can alter the money supply.

Question 2

How is a politician similar to an entrepreneur?
 
  A) Each advances a project solely in the public interest.
  B) Each advances a project only if the expected marginal benefits equal the expected marginal costs.
  C) Each advances a project only if the expected marginal benefits exceed the expected marginal costs.
  D) Each advances a project only if they impose no negative externalities.

[Swizqar]

Answer to Question 1

D

Answer to Question 2

C

[fnuegbu]

Correct answers!

[Swizqar]

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