Author Question: A bank may hold secondary reserves, such as U.S. government securities because: a. they pay higher ... (Read 53 times)

asmith134 · **on:** Jun 30, 2018

A bank may hold secondary reserves, such as U.S. government securities because:
a. they pay higher interest rates than deposits at the Fed, and are easily converted into cash assets.
b. they pay higher interest rates than deposits at the Fed, even though they are hard to convert assets.
c. they pay lower interest rates than deposits at the Fed, but are more easily converted into cash assets.
d. they pay lower interest rates than deposits at the Fed, and are hard to convert into cash assets.

Question 2

Contrary to what believers in the Phillips curve would say, U.S. economic data from 1955 to 2000 show evidence of:
a. a positive relationship between the unemployment rate and inflation.
b. no short-run relationship between the unemployment rate and inflation.
c. increases in both unemployment and inflation rates.
d. a constant rate of inflation, with changing rates of unemployment.
e. a constant rate of unemployment, with changing rates of inflation.