Suppose a bank has $1,000 in deposits and $100 in reserves. If the desired reserve ratio is 5 percent, how much can this bank increase its loans?
A) $80 B) $0 C) $100 D) $400 E) $50
E
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If Px = Py, then when the consumer maximizes utility,
A) X must equal Y. B) MU(X) must equal MU(Y). C) MU(X) may equal MU(Y), but it is not necessarily so. D) X and Y must be substitutes.
Data on trade barriers and the growth of per capita GDP indicate that
a. there is no link between the degree of a country's trade openness and its economic growth. b. more open economies have grown more rapidly than those that have imposed substantial barriers restricting trade. c. economies that have imposed high trade barriers have, on average, grown more rapidly than economies that are more open to international trade. d. countries with higher trade barriers have been able to achieve higher levels of per capita GDP than those that are more open to international trade. e. both c and d are correct.
When the economy is operating at an output rate less than full-employment capacity,
a. a strong demand for resources will cause resource prices to rise. b. actual unemployment will be less than the natural rate of unemployment. c. the rate of inflation will tend to rise. d. weak demand for investment will place downward pressure on real interest rates.
Morgan, a financial advisor, has told her clients the following things. Which of her statements is not correct?
a. "U.S. government bonds generally pay a higher rate of interest than corporate bonds." b. "The interest received on corporate bonds is taxable." c. "U.S. government bonds have the lowest default risk." d. "If you purchase a municipal bond, you can sell it before it matures."