Suppose a bank has $200,000 in deposits, a required reserve ratio of 25 percent, and bank reserves of $100,000. Then this bank can make new loans in the amount of
A. $20,000.
B. $100,000.
C. $50,000.
D. $25,000.
Answer: C
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How does economies of scale improve second-degree price discrimination?
A. Firms have increasing opportunity costs and therefore must sell more goods at higher prices to make up the extra costs. B. ATC decreases and then increases which affects the cost to firms. C. People have increasing marginal benefit as ATC decreases. D. ATC decreases as output increases which allows a firm to charge lower prices at different output levels.
Continuing from the question above, an additional 10 people join the group who have expected medical spending of $5,000 per person on average. The new premium will be approximately
a. $1,500 b. $2,200 c. $2,500 d. $4,500
When the price of a good falls, consumers buy more of the good because it is cheaper relative to competing goods. This statement describes the
a. consumer equilibrium effect. b. price effect. c. income effect. d. substitution effect.
Which is an example of a differentiated oligopoly?
A. The beer industry. B. The cement industry. C. The primary aluminum industry. D. The polyester fiber industry.