If the bank of Waterloo receives a $10,000 deposit and the reserve requirement is 10 percent, how much can the bank loan out? (Assume that before the deposit this bank is just meeting its legal reserve requirement.)
A) $1,000
B) $9,000
C) $10,000
D) $11,000
Answer: B
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Holding supply constant, an increase in demand leads to
A) lower prices and higher quantity supplied. B) lower prices and lower quantity supplied. C) higher prices and higher quantity supplied. D) higher prices and lower quantity supplied.
The price charged by a monopolist is socially inefficient because the price
A) exceeds the true marginal cost of the resources used. B) is less than the opportunity cost of the resources used. C) puts the monopolist into a higher tax bracket. D) is too low.
All remedies for externalities share the goal of
a. moving the allocation of resources toward the market equilibrium. b. moving the allocation of resources toward the socially optimal equilibrium. c. increasing the allocation of resources. d. decreasing the allocation of resources.
When there are very few substitutes for a good, the demand for the good will tend to be
A. perfectly elastic. B. inelastic. C. elastic. D. unitary.