If loans are $300,000 . demand deposits are $600,000 . and the legal reserve requirement is 40 percent, then excess reserves are
a. $360,000
b. $240,000
c. $120,000
d. $60,000
e. $30,000
D
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Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S1 (point A). If there is a shortage of apples, how will the equilibrium point change?
A) There will be no change in the equilibrium point. B) The equilibrium point will move from A to B. C) The equilibrium point will move from A to C. D) The equilibrium point will move from A to E.
A farmer uses M units of machinery and L hours of labor to produce C tons of corn, with the following production function C = L0.5M0.75. This production function exhibits
A) decreasing returns to scale for all output levels B) constant returns to scale for all output levels C) increasing returns to scale for all output levels D) no clear pattern of returns to scale
Changes in floating exchange rates move a country's economy to:
A. a low value for its inflation rate. B. a zero value for its official settlements balance. C. its potential real GDP. D. all of the above.
Assume that Economy A and Economy B have the same resources, but that individuals in Economy A have specialized whereas individuals in Economy B have not. Given this information, you can determine that
A) Economy A will have a higher output than Economy B. B) Economy A will have a lower output than Economy B. C) Economy A and Economy B will have identical outputs. D) individuals in Economy A will have lower incomes than individuals in Economy B.