Suppose you deposit $2,000 into Bank of America and that the required reserve ratio is 10 percent. How does this affect the bank's balance sheet?
A) Required reserves rise by $2,000. B) Excess reserves rise by $1,800.
C) Reserves rise by $200. D) Deposits rise by $1,000.
B
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An increase in labor supply will:
a. decrease the equilibrium wage rate and increase the number of workers hired. b. increase the equilibrium wage rate and decrease the number of workers hired. c. decrease both the equilibrium wage rate and the number of workers hired. d. increase both the equilibrium wage rate and the number of workers hired.
When economists say a market has "barriers to entry," they refer to:
A. monopolists being prohibited from selling their products to certain customers. B. a policy that some countries establish to reduce imports from other countries. C. factors that prevent other firms from challenging a firm with market power. D. economic profits that are positive, but too high to encourage entry.
Which of the following is FALSE about public-sector decision making?
A. The price charged to consumers is often less than its full opportunity cost. B. Decisions are based on majority rule. C. Incentives play a role in decision making. D. Decisions involve no opportunity cost.
Economists believe free trade areas such as NAFTA and the European Union are problematic because they
A. encourage countries to rely on others rather than being self-sufficient. B. lead to globalization. C. tend to lead to free trade rather than fair trade. D. can lead to regional trading blocs that restrict trade with outsiders.