The required reserves of a bank equal its ________ the required reserve ratio
A) deposits divided by
B) deposits multiplied by
C) loans divided by
D) loans multiplied by
Answer: B
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For a perfectly competitive firm, profit is maximized at the output level where i. total revenue exceeds total cost by the largest amount. ii. marginal revenue equals marginal cost. iii. price equals marginal cost
A) i only B) ii only C) ii and iii D) i and ii E) i, ii, and iii
When the Fed is acting as fiscal agent for the Treasury, it will
A) buy securities from the Treasury, thereby providing the Treasury with money to pay the government's bills. B) receive and process bids for Treasury securities in preparation for the Treasury's auction of securities. C) serve as a lender of last resort. D) supply the Treasury with paper money whenever the Treasury does not have enough funds to meet its bills. E) supervise the Treasury by examining its books.
Figure 9.6 represents the market for health insurance. Suppose there are two types of consumers, low-cost consumers with $2,000 average medical expenses per year, and high-cost customers with $4,000 average medical expenses per year. If $Y is the price the insurance company would charge if it expected 40% of its customers to be high-cost, the price it would charge if it expected 50% of its customers to be high-cost would be:
A. greater than $Y. B. less than $Y. C. equal to $Y. D. 50% of $Y.
If average variable costs are increasing while average total costs are decreasing, then
A) marginal cost must lie between average variable and average total costs. B) marginal cost must equal average variable cost. C) marginal cost must equal average total cost. D) fixed costs must be zero.