The Ability to Purchase Production Inputs on Credit Allows the Firm

question 222

True/False

The ability to purchase production inputs on credit allows the firm to partially (or may be even totally) offset the length of time resources are tied up in the operating cycle.

Recognize how reserve requirements affect banks' lending capacities.

Grasp the significance of the independence of the Federal Reserve from other branches of government.

Understand the relationship between the money supply, interest rates, and the level of economic activity.

Identify the methods by which commercial banks can increase their reserves.