Assume a reserve requirement of 10 percent. A commercial bank has total reserves of $100,000, excess reserves of $25,000, and total checkable deposits outstanding of $750,000. If the reserve requirement were increased to 15 percent,
a. total expansion of the money supply would be limited to $750,000.
b. excess reserves would be decreased to $12,500.
c. the bank would have no alternative but to decrease its check able deposits.
d. the bank would be $12,500 short of required reserves.
d. the bank would be $12,500 short of required reserves.
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In a certain economy, the components of aggregate spending are given by:C = 100 + 0.9(Y - T) - 500rI = 150 - 1,000rG = 200NX = 50T = 100Given the information about the economy above, what is the short-run equilibrium output if the real interest rate is 6 percent?
A. 320 B. 3,200 C. 3,500 D. 450
The small group of East Asian countries that experienced high rates of growth in the 1980s and 1990s are referred to as
A) industrial countries. B) newly industrializing countries. C) countries with low standards of living. D) education-deprived countries.
Which of the following is an impact of the restriction on immigration on the domestic firms?
a. The domestic firms would produce more and reap greater profits. b. The domestic firms would hire more unskilled laborers at lower wages. c. The domestic firms would charge low prices for their products. d. The domestic firms would have to pay higher wages and make less profit. e. The domestic firms would make above normal profits in the long run.
The largest component of aggregate demand is
a. investment spending. b. consumer spending. c. government spending. d. total imports.