Assume that banks do not hold excess reserves, all deposits remain in the banking system and that the required reserve ratio is 20%. If one bank obtains excess reserves of $10,000, then the maximum increase in money supply is
A) $10,000.
B) $20,000.
C) $40,000.
D) $50,000.
Ans: D) $50,000.
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If there are an estimated 20,000 barrels of unknown reserves of oil, annual consumption of oil is 800 barrels, and it is estimated that the supply of oil will be depleted in 50 years, how many barrels of known reserves of oil are there estimated to
be, all else equal? A) 1,250 B) 16,000 C) 20,000 D) 320,000
A normative economic statement:
a. is a model used to collect data. b. is a statement of fact. c. is a statement of what ought to be, not what is. d. indicates what will occur if certain assumptions are true.
Assume the United States can use a given amount of its resources to produce either 20 airplanes or 8 automobiles and Japan can employ the same amount of its resources to produce either 20 airplanes or 10 automobiles. The U.S. should specialize in:
a. airplanes. b. automobiles. c. both goods. d. neither good.
In accordance with the law of supply, both individual and market supply curves are drawn:
A. horizontal. B. vertical. C. downward-sloping. D. upward-sloping.