A bank currently has $50 million in deposits, $6 million in cash in the vault, $4 million on deposit with the Fed, and $5 million in government securities. The reserve ratio is 20 percent. A new deposit is made of $1 million. What is the maximum size loan the bank can make once the check clears?
A. 0
B. $1 million
C. $5.8 million
D. $800,000
Answer: D
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Scott and Cindy both produce only pizza and tacos. In one hour, Scott can produce 20 pizzas or 40 tacos. In one hour, Cindy can produce 30 pizzas or 40 tacos. Scott's opportunity cost of producing 1 taco is
A) 1/2 of a pizza. B) 1 pizza. C) 2 pizzas. D) 20 pizzas. E) 2 tacos.
After a firm makes both short and long run adjustments in its production plan following a reduction in the wage,
A. the marginal product of labor will be higher. B. the marginal product of labor will be lower. C. the marginal product of capital will be unchanged. D. the marginal product of capital may be higher or lower depending on the degree of substitutability between capital and labor. E. (a) and (c) F. (a) and (d) G. (b) and (c) H. (b) and (d)
Why is the international financial system today often called a "nonsystem?"
Which of the following is a reason why government debt is different from individual debt?
A. Government debt can be owed to foreigners, unlike the debt of individuals. B. Government cannot create money to finance its debt. C. Government has fewer sources of income to finance its debt than individuals. D. Government is ongoing, individuals are not.