Assume that a bank holds legal reserves of $800, the required reserves are $400 and total deposit is $4,000 . If the government purchases bonds worth $200, excess reserves will increase by _____
a. $420
b. $180
c. $100
d. $80
e. $40
b
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Consumer finance companies, because of the __________-term nature of their liabilities, prefer to hold __________-term assets
A) long; long B) long; short C) short; long D) short; short
If the interest rate increases, then the:
a. economy will move to a new point along the existing consumption function. b. consumption function will shift up. c. consumption function will shift down. d. investment demand curve will shift up. e. economy will move to a new point along the existing investment demand curve.
According to the quantity theory of money, which one of the following economic variables would change in response to an increase in the money supply?
a. prices b. real income c. velocity d. employment
One way for firms to analyze their choices in an oligopoly is by using:
A. cost minimization theory. B. marginal revenue maximization strategy. C. game theory. D. None of these is an effective method for oligopolists.