A $5 million deposit outflow from a bank has the immediate effect of
A) reducing deposits and reserves by $5 million.
B) reducing deposits and loans by $5 million.
C) reducing deposits and securities by $5 million.
D) reducing deposits and capital by $5 million.
A
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The short-term fluctuations experienced in the economy due to changes in levels of economic activity are called
A. the natural rate of unemployment. B. a recession. C. the business cycle. D. an expansion.
A perfectly competitive firm in the short-run maximizes its profit by producing the output where:
a. marginal cost equals price. b. marginal cost equals marginal revenue. c. total revenue minus total cost is at a maximum. d. all of these.
Which of the following is true? a. Economists assume that there are no private property rights in a free market
b. A free market is also known as a fettered market. c. A voluntary transaction means that all parties to the transaction must expect to benefit. d. People always receive goods and services at a discounted price in a free market. e. An economic growth is represented by an inward shift of the production possibility curve.
Investments
A. are more profitable when interest rates rise. B. are less profitable when interest rates rise. C. are more profitable when economic rents rise. D. are less profitable when economic rents rise.