When bank deposits increase from $1 million to $2 million, bank reserves increase from $100,000 to $200,000. If banks hold no excess reserves, then the required reserve ratio is
What will be an ideal response?
.10
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The economic problem of scarcity
A. is unique to a capitalist economy. B. requires that choices be made among alternatives. C. disappears as technology advances. D. affects only less-developed countries.
Most modern economic analysis is normative in nature, but involves questions with positive aspects
Indicate whether the statement is true or false
If the law of diminishing returns applies to labor then
A) the marginal product of labor must eventually become negative. B) the average product of labor must eventually become negative. C) the marginal product of labor must rise and then fall as employment rises. D) the average product of labor must rise and then fall as employment increases. E) after some level of employment, the marginal product of labor must fall.
The following is an example of risk aversion
a. those applying for a well-paid job tend to be the most qualified b. more reckless drivers opt for cars with fewer safety devices c. the contractor with the lowest bid for a is the most qualified d. Initial Public Offerings (IPOs) seek investors when prospects look poor