Refer to Table 9-5. The required reserve ratio is 10%. By how much could the banking system ultimately increase the money supply if all excess reserves are loaned out, people never withdraw cash, and all loan proceeds are spent?
A) $30 million
B) $70 million
C) $300 million
D) $700 million
Ans: D) $700 million
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Harmonization of standards refers to
A) the elimination of tariffs and quotas by trading partners. B) common product safety, environment, labor, and fair competition standards agreed upon by trading partners. C) the acceptance or keeping of a trading partner's standards as valid and sufficient by another trading partner. D) separate standards held by different trading partners which other partners refuse to recognize. E) All of the above.
The labor supply curve starts to bend backward at the point where
A. the total utility of leisure exceeds the total disutility of labor. B. the marginal utility of additional income becomes zero. C. the income effect comes to dominate the substitution effect. D. the substitution effect comes to dominate the income effect.
When Acme Dynamite produces 250 units of output, its variable cost is $2,000, and its fixed cost is $500. It sells each unit of output for $25. If the price of dynamite drops to $10, should Acme Dynamite continue to operate in the short run?
A. No, because price is less than average total cost. B. Yes, because price is greater than average variable cost. C. Yes, because price is less than average variable cost. D. No, because price is not greater than average total cost.
The federal funds rate is stated as:
A. a real interest rate. B. a rate that is automatically indexed to inflation. C. a nominal interest rate. D. the current rate less the expected rate of inflation.