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If Buyers Have Inadequate Information About Products, Then the Market

question 272

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If buyers have inadequate information about products, then the market might not end up in equilibrium.


Definitions:

Excess Reserves

Banks' reserves held at the central bank over and above the required minimum, which can influence the banks' ability to lend and thus affect the money supply.

Federal Reserve System

The central banking system of the United States, responsible for monetary policy, regulation of banks, and maintaining financial stability.

Federal Funds Rate

The interest rate at which depository institutions lend reserve balances to other depository institutions overnight, on an uncollateralized basis.

Required Reserves

The minimum amount of funds that banks must hold in reserve against deposits, as mandated by the central bank.

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