For a commercial bank, the term "reserves" refers to
A) a banker's concern ("reservation") in making loans to an individual without a job.
B) the profit that the bank retains at the end of the year.
C) the cash in its vaults and its deposits at the Federal Reserve.
D) the net interest that it earns on loans.
C
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Refer to the table above. If consumption expenditure increases to $200,000 in the next year, ________, all other variables remaining unchanged
A) gross domestic product will fall to $367,000 B) gross domestic product will increase to $367,000 C) gross domestic product will increase to $400,000 D) gross domestic product will fall to $400,000
Because of the lack of buyer's information about a perfectly functioning used car:
A. the buyer will pay less than what it's worth because of the chance that it will be a lemon. B. sellers of perfectly functioning used cars will be more likely to enter the market. C. the market will eventually become saturated with high quality cars. D. All of these statements are true.
According to the hypothetical economy in Figure 5.2, real GDP differs from nominal GDP from 1980 to 2000 because
A. Inflation caused the dollar value of output to decrease. B. Population growth exceeded output growth. C. Price level increases caused real GDP to increase. D. Inflation caused the dollar value of output to increase.
If the monetary multiplier is 6, then the reserve ratio must be:
A. 1.67 B. 0.6 C. 0.167 D. 0.06