If the reserve requirement is 20 percent and a new deposit of $10,000 in cash is made by a customer to their checking account, by how much are excess reserves increased?
a. $10,000
b. $8,000
c. $4,000
d. $2,000
b
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In a simplified banking system in which all banks are subject to a 10 percent required reserve ratio, a $1,000 open market sale by the Fed to a bank would cause the money supply to:
a. increase by $1,000. b. increase by $100,000. c. decrease by $10,000. d. decrease by $1,000. e. remain unchanged.
In a market where the forces of demand and supply operate without government intervention, the market price will
A. always be the equilibrium price. B. generally stay above the equilibrium price. C. generally stay below the equilibrium price. D. tend toward the equilibrium price.
Figure 33-3
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Given the situation in graph (1) in Figure 33-3, what can be expected to change in graph (1) when the economy’s self-correcting mechanism operates?
A. Aggregate demand increases. B. Aggregate demand decreases. C. Aggregate supply increases. D. Aggregate supply decreases.
The act of selling an item in slightly altered forms at different prices and to different groups of consumers is known as
A) bundling. B) versioning. C) tie-in sales. D) lemons marketing.