If a bank receives a new demand deposit of $10,000 . and the legal reserve requirement is 20 percent, then the bank can lend out
a. $2,000
b. $10,000
c. $40,000
d. $8,000
e. $0
D
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A price searcher faces the following demand function: At $7, 6, 5, 4, and $3, the quantity demanded is 300, 400, 500, 600, and 700 units respectively. If the firm's marginal cost is $300 at any level of output, it would maximize net revenues by
A) producing 400 units and charging $6. B) producing 500 units and charging $5. C) producing 600 units and charging $4. D) producing 700 units and charging $3.
According to the graph shown, the equilibrium price is:
According to the graph shown, the equilibrium price is:
A. $5
B. $10
C. $15
D. $20
If the banking system has $50 billion in excess reserves, and the required reserve ratio is 25 percent, what is the maximum amount by which the money supply can be increased?
a. $250 billion b. $200 billion c. $50 billion d. $25 billion
Explain what economic efficiency is. How does a price system lead to economic efficiency?
What will be an ideal response?