If excess reserves in the banking system are $4,000, checkable deposits are $40,000, and the legal reserve ratio is 10 percent, then actual reserves are:
A. $6,000.
B. $8,000.
C. $5,000.
D. $4,000.
Answer: B
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Rising interest-rate risk
A) increased the cost of financial innovation. B) increased the demand for financial innovation. C) reduced the cost of financial innovation. D) reduced the demand for financial innovation.
Suppose a roll of paper towels costs $5 at Sam's Quick Stop, a local quick stop, and the same roll of paper towels costs $2 at Big Supplies, a large, retailer located in a more remote location. If a customer's total cost of travel to Sam's Quick Stop is $2 and is $6 to Big Supplies, which of the following is true?
A) The consumer is indifferent as to where they buy the paper towels. B) It is cheaper for the consumer to buy the paper towels at Sam's Quick Stop. C) It is cheaper for the consumer to buy the paper towels at Big Supplies. D) It is more expensive for the consumer to buy the paper towels at Sam's Quick Stop.
One goal of rate-of-return regulation is the prevention of
A) free market entry. B) positive economic profits. C) poor quality service. D) environmental degradation.
The optimal time for the implementation of restrictive fiscal policy would be
a. before inflation accelerated. b. after inflation accelerated. c. during a recession. d. after the price level had risen significantly.