Assume we have a simplified banking system in balance-sheet equilibrium. Also assume that all banks are subject to a uniform 10 percent reserve requirement and demand deposits are the only form of money. A commercial bank receiving a new demand deposit of $100 would be able to extend new loans in the amount of:
a. $90.
b. $1,000.
c. $100.
d. $10.
a
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One feature of the volunteer's dilemma is that as the group gets larger, individuals in the group are less likely to volunteer
Indicate whether the statement is true or false
How does a production quota influence farm prices and output?
What will be an ideal response?
Which of the following statements regarding labor supply is false?
a. Jerry's labor supply curve can bend backward if the income effect of a higher wage rate outweighs the substitution effect. b. Bob's labor supply curve will not bend backward if the wage rate is never so high that the income effect outweighs the substitution effect. c. If there is a wage rate above which the income effect is at least as great as the substitution effect, the labor supply curve will be vertical or bend backward. d. The labor supply curve will slope upward if the income effect dominates the substitution effect. e. Hayden's offer to work more hours as the result of a wage increase suggests that the substitution effect dominates the income effect.
The Condorcet paradox demonstrates that the result of a majority vote may be affected by
a. moral hazard. b. adverse selection. c. the order of the votes. d. All of the above are correct.