The legal reserve requirement is the
a. actual amount of reserves that banks must hold
b. excess amount of reserves that a bank must hold
c. minimum amount of reserves the Fed requires a bank to hold
d. total amount of reserves that banks hold at all times
e. maximum amount of reserves that banks can hold to remain liquid
C
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Suppose the supply of apartments in Minneapolis is perfectly elastic. The effect of a $100 per month tax on all apartments is that
A) landlords pay none of the tax and there is a surplus of apartments. B) landlords pay all of the tax and suffer all of the deadweight loss. C) landlords pay all of the tax and no changes take place in the quantity of apartments supplied. D) renters pay all of the tax. E) the government collects no tax revenue because the supply is perfectly elastic.
Suppose the interest parity condition holds. Also assume that the one-year interest rate in the United States is 6% and that the one-year interest rate in Canada is 5%. What does this imply about the current versus future expected exchange rate (for the U.S. and Canadian dollars)? Explain
What will be an ideal response?
Juliana, Gabrielle, and Marcela want to start a business they are the only owners and the company does not issue stock. The type of business they want to start is a
A) sole proprietorship. B) partnership. C) corporation. D) Any of the above could be correct.
Under the gold standard, a nation with a private balance of payments surplus would experience:
A. higher interest rates, lower inflation, and lower output. B. lower interest rates, higher inflation, and higher output. C. lower interest rates, lower inflation, and lower output. D. higher interest rates, higher inflation, and higher output.