Opportunity cost is defined? A) only in terms of money spent B) as the value of

Question

Opportunity cost is defined?

A) only in terms of money spent

B) as the value of all alternatives not chosen

C) as the value of the best alternative not chosen

D) as the difference between the benefits from a choice and the benefits from the next best alternative

E) as the difference between the benefits from a choice and the costs of that choice

Lowering the discount rate is a way to expand the money supply because

A) it encourages banks to borrow from the Fed so they can more easily accommodate their customers' needs for loans

B) it encourages business customers to borrow directly from the Fed

C) a lower discount rate reduces the amount of reserves banks are required to keep

D) a lower discount rate automatically reduces excess reserves

E) it encourages banks to sell U.S. government securities and increase their cash reserves

All of the following are powers of the Federal Reserve System except

A) the ability to buy and sell government securities

B) the authority to issue Federal Reserve notes

C) the responsibility to clear checks

D) the obligation to make loans to the general public

E) the power to set the reserve requirement for banks

The labor force participation rate for women in the United States has

A) stayed the same over the last 30 years

B) increased significantly since the 1950s

C) been influenced by decreasing real wages since 1960

D) fluctuated substantially both upward and downward since the 1950s

E) increased only very slightly since the 1950s

A) only in terms of money spent

B) as the value of all alternatives not chosen

C) as the value of the best alternative not chosen

D) as the difference between the benefits from a choice and the benefits from the next best alternative

E) as the difference between the benefits from a choice and the costs of that choice

Lowering the discount rate is a way to expand the money supply because

A) it encourages banks to borrow from the Fed so they can more easily accommodate their customers' needs for loans

B) it encourages business customers to borrow directly from the Fed

C) a lower discount rate reduces the amount of reserves banks are required to keep

D) a lower discount rate automatically reduces excess reserves

E) it encourages banks to sell U.S. government securities and increase their cash reserves

All of the following are powers of the Federal Reserve System except

A) the ability to buy and sell government securities

B) the authority to issue Federal Reserve notes

C) the responsibility to clear checks

D) the obligation to make loans to the general public

E) the power to set the reserve requirement for banks

The labor force participation rate for women in the United States has

A) stayed the same over the last 30 years

B) increased significantly since the 1950s

C) been influenced by decreasing real wages since 1960

D) fluctuated substantially both upward and downward since the 1950s

E) increased only very slightly since the 1950s

Explanation / Answer

1. C) as the value of the best alternative not chosen

Opportunity cost is the value of next best alternative foregone.

2. A) it encourages banks to borrow from the Fed so they can more easily accommodate their customers' needs for loans.

Discount rate is the rate at which Fed gives loans to banks. When discount rate decreases then borrowings of banks becomes less expensive so they borrow more money from the Fed and lend it out.

3. D) the obligation to make loans to the general public

Federal reserve does not make loan to public. It is the function of commercial banks.

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