Assume that the reserve requirement is 10 percent. A $1,000 cash deposit into a savings account will immediately increase the bank's required reserves by _____
a. $10,000.
b. $500.
c. $100.
d. $1,500.
e. $10.
c
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Refer to Table 20-11. Suppose an economy has only three goods and the typical family purchases the amounts given in the table above. If 2011 is the base year, then what is the CPI for 2016?
A) 40.08 B) 100 C) 180 D) 208
Suppose the Federal Reserve's short-run response to any change in the economy is to change the money supply to maintain the existing real interest rate
What would happen to money supply if there were a reduction in government purchases? Given the Fed's policy, what would happen in the very short run (before general equilibrium is restored) to output and the real interest rate? What must happen to the LM curve and the price level to restore general equilibrium?
Suppose that the exchange rate between Canadian dollars and U.S. dollars is $0.60 U.S. dollars per Canadian dollar. If the exchange rate goes to $0.50 U.S. dollars per Canadian dollar, it would tend to:
a. increase U.S. exports to Canada b. decrease U.S. exports to Canada. c. increase Canadian exports to the United States. d. both (b) and (c)
A country is said to have an absolute advantage over another country in the production of a product if it uses more resources to produce that product than the other country does.
Answer the following statement true (T) or false (F)