Refer to Table 9-5. The required reserve ratio is 10%. What is the maximum amount of new loans that Bolton bank can create and by how much can Bolton initially increase the money supply, assuming that newly created deposits are transferred to another bank?
A) $30 million; $30 million
B) $70 million; $30 million
C) $70 million; $70 million
D) $70 million; $700 million
Ans: C) $70 million; $70 million
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Suppose that you deposit $2,000 in your bank and the required reserve ratio is 10 percent. The maximum loan your bank can made as a direct result of your deposit is
A) $200. B) $1,800. C) $2,000. D) $20,000.
The highest and most prolonged period of unemployment in the United States over the last 125 years occurred during
A) World War II. B) the 1890s Depression. C) the 1990-1991 recession. D) the Great Depression of the 1930s.
Asymmetric information increases the economic value that an agreement between two parties creates
Indicate whether the statement is true or false
When Tversky and Khaneman asked one group of people to imagine that, having previously purchased a ticket for $10, they arrive at the theater to discover they have lost their ticket and a second group to imagine that they arrive just before the performance to buy a ticket and find they have lost $10 from their wallets, they found that people in the lost ticket group were more likely to say they would ________ the performance, even though the rational choice model predicts that people in ________.
A. no longer attend; both groups should be equally likely to say they would still attend B. still attend; both groups should be equally likely to say they would still attend C. still attend; the lost $10 group should be more likely to say they would still attend D. no longer attend; the lost $10 group should be more likely to say they would no longer attend