If a bank has $60,000 in legal reserves and is subject to a 10 percent reserve requirement, it could have outstanding check able deposits to the extent of
a. $60 million.
b. $600,000.
c. $6 million.
d. $60,000.
b. $600,000.
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C = 2,800 + 0.9y
I = 750 G = 1,200 NX = 150 Given the equations for C, I, G, and NX above, what is the equilibrium level of GDP (Y)? What will be an ideal response?
Lenders generally want a higher interest rate to compensate them when loans stretch over a longer period because:
A. the opportunity cost increases over time. B. there's more uncertainty about potential future investment opportunities. C. lenders want to be compensated for being unable to get their money back quickly. D. All of these are true.
If the equilibrium rate of interest would be 10 percent, but the usury law sets 8 percent,
A. the quantity of funds supplied would be greater than the quantity demanded. B. economic efficiency would be promoted. C. some applicants for loans would likely be turned down. D. lenders would be able to fund fully all requests for loans.
Franchising mitigates:
A. the hold-up problem. B. the principal-agent problem. C. opportunism. D. relationship-specific investment.