The reserve requirement is:
A. a loose guideline for how much banks must hold in reserves.
B. the regulation that sets the minimum fraction of deposits banks must hold in reserve.
C. currently set at $2 million for most banks.
D. the dollar amount of cash banks must keep on hand and not loan out.
Answer: B
You might also like to view...
If the MPC is 0.75, and the government cuts spending by $100b, the overall effect on GDP will be:
A. a decrease of $400b. B. an increase of $250b. C. a decrease of $250b. D. an increase of $400b.
Which of the following functions is not performed by prices in a free market?
a. guiding the allocation of resources b. conveying information about the marginal cost of production c. making the distribution of income more equitable d. replacing the need for governmental supervision of production
Allowing an inventor to have the exclusive rights to market her new invention will lead to (i) a product that is priced higher than it would be without the exclusive rights. (ii) desirable behavior in the sense that inventors are encouraged to invent. (iii) higher profits for the inventor
a. (i) and (ii) only b. (ii) and (iii) only c. (i) and (iii) only d. (i), (ii), and (iii)
Exchange rates that are allowed to fluctuate in the open market in response to changes in supply and demand are known as
A. fixed exchange rates. B. flexible exchange rates. C. gold exchange rates. D. IMF exchange rates.