If the actual reserve/deposit ratio equals 8% and the desired reserve/deposit ratio for this bank is 10%, the bank should:
A. send the extra reserves to the central bank.
B. stop making loans.
C. make more loans in order to earn interest.
D. do nothing because this is a profitable situation.
Answer: B
You might also like to view...
How would you interpret (1) an upward sloping curve and (2) a zero slope curve in a two variable diagram?
What will be an ideal response?
When U.S. Steel, a steel producer, bought control of iron ore companies at the beginning of the 20th century, the company was initiating
A) a horizontal merger. B) a vertical merger. C) a cartel. D) an expropriation.
The demand for a movie ticket is probably _________________ than is the demand for a Broadway show ticket because ______________.
A. less price elastic; a movie ticket requires a smaller portion of one's income. B. more price elastic; a movie ticket requires a smaller portion of one's income. C. less price elastic; a movie ticket has fewer available substitutes. D. more price elastic; a movie ticket has fewer available substitutes.
Which of the following statements is false?
A. Recognizing tradeoffs is an essential part of good decision making. B. Most government policies provide people with incentives to take certain actions and avoid others. C. People will pursue an action as long as it has benefits associated to it. D. Every choice involves a tradeoff.