As the Supply of Funds in the Banking System ____

question 21

Multiple Choice

As the supply of funds in the banking system ____, the federal funds rate ____.

• A) increases; declines
• B) increases; increases
• C) declines, declines
• D) none of the above

Understand the impact of the service rate and arrival rate on system utilization and queue lengths.

Describe the concepts of FIFO, LIFO, and other queue disciplines.

Apply Little's Law in appropriate contexts.

Understand the distinction between single-phase and multi-phase queuing systems.

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Definitions:

Sunk Cost

An expense that is irreversible and non-recoverable, hence it should not affect upcoming corporate choices.

Incremental Cost

The additional cost incurred to produce one more unit of a good or service.

Opportunity Cost

The potential benefit that is missed out on when choosing one alternative over another.

Opportunity Costs

The cost of an alternative that must be foregone to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.