-In the Figure Above, Suppose the Price of a Pound

question 288

Multiple Choice

-In the figure above, suppose the price of a pound of pecans is negatively related to the quantity of peanuts that farmers are willing to supply. If the price of pecans increases

• A) the curve will shift rightward.
• B) the curve will shift leftward.
• C) there is a movement along the curve.
• D) the curve will be unaffected.

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Definitions:

Excess Reserves

The excess funds that a bank or financial institution maintains beyond the minimum mandated by regulatory bodies, creditors, or its own internal policies.

Money Supply

The total amount of money—cash, coins, and balances in bank accounts—in circulation within a country's economy at a specific time.

Required Reserve Ratio

The fraction of deposits that banks are required to keep on hand and not lend out, as set by the central bank.

Discount Rate

The interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility.