When a bank accepts a checkable deposit from a customer, its deposits will increase and its excess reserves will
A. increase by less than the deposits.
B. increase by the same amount as deposits.
C. decrease.
D. increase by more than the deposits.
Answer: A
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Which of the following might be considered an automatic fiscal stabilizer?
A) government spending for the war effort B) 401(k) retirement program C) government budgeting for education D) unemployment compensation
If the U.S. capital and financial account balance has a $30 million surplus and there was no change in official reserves during that year, we know that
A) the United States has a $30 million current account deficit. B) U.S. official reserves have increased by $30 million. C) the United States is a net lender. D) U.S. net foreign lending must equal $30 million. E) the United States has a $30 million current account surplus.
List three characteristics of demand curves. Make sure to explain the shape of the curve and the meaning of the vertical and horizontal intercepts
What will be an ideal response?
When $1 million is deposited at a bank, the required reserve ratio is 20 percent, and the bank chooses not to hold any excess reserves but makes loans instead, then, in the bank's final balance sheet
A) the assets at the bank increase by $800,000. B) the liabilities of the bank increase by $1,000,000. C) the liabilities of the bank increase by $800,000. D) reserves increase by $160,000.