Banks are said to ration credit when they refuse to lend above a certain interest rate. The purpose of such a policy is to minimize _____ of lending.

Select one:

a.adverse selection problems

b.moral hazard problems

c.transactions costs

d.all of the above

Efficiency wages are _____ the level firms would have to pay to fill all their open positions.

Select one:

a.higher than

b.lower than

c.equal to

d.none of the above

A bank can increase its level of reserves by

Select one:

a.selling securities.

b.increasing borrowings.

c.calling loans.

d.all of the above.

When a bank refuses to lend at high interest rates, it is

Select one:

a.requiring collateral.

b.requiring compensating balances.

c.credit rationing.

d.none of the above.

If $100 in transaction deposits were withdrawn, what is the minimum amount the bank would have to borrow to meet the reserve requirement, if there were no other changes to the balance sheet?AssetsLiabilitiesReserves$60Transaction Deposits$500Bonds$400CDs$300Loans$600Equity_____

Select one:

a.$30

b.$50

c.$80

d.$100