The reserve ratio is 20 percent. The Fed buys $1 million in government securities from a bond dealer by transmitting the funds to the dealer's deposit account at Bank A. Bank A loans the maximum amount possible to a construction company, which buys materials from a lumber yard. The lumberyard deposits the construction company's check in Bank B. What is the maximum loan Bank A can now make and the maximum loan Bank B can now make?
A. Bank A: 0; Bank B: $640,000
B. Bank A: 0; Bank B: $800,000
C. Bank A: $800,000; Bank B: 0
D. Bank A: $800,000; Bank B: $640,000
Answer: A
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Assume the U.S. population is 300 million. If the working age population is 240 million, 150 million are employed, and 6 million are unemployed, what is the labor force?
A) 300 million B) 240 million C) 156 million D) 150 million E) 144 million
If the production technology in a Robinson Crusoe economy has increasing returns to scale, there is no production/consumption plan that is efficient.
Answer the following statement true (T) or false (F)
The measure of saving in the National Income and Product Accounts includes
A) capital gains on stocks, bonds, houses, and other assets. B) purchases of consumer durables. C) nominal interest payments which households receive from corporations. D) all of the above.
Globalization has depressed wages in western industrialized countries, particularly those for
A) highly skilled workers. B) highly educated workers. C) semi-skilled workers. D) low skilled workers.