Suppose a bank has $10 million in deposits with no excess reserves, and the reserve requirement is 25%. If the Fed reduces the reserve requirement to 20%, the bank will now have excess reserves of
A) $0.
B) $0.5 million.
C) $1.5 million.
D) $2 million.
B
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America’s antitrust laws are used to protect competition against possible encroachment by monopoly. This is an example of government as
A. regulator of businesses. B. buyer of goods and services. C. tax collector. D. redistributor.
Give an example of an automatic stabilizer. Explain how automatic stabilizers work in the case of recession
What will be an ideal response?
Since most banks have positive gaps and negative duration gaps, an increase in market interest rates will
A) increase bank profits and increase bank capital. B) increase bank profits and decrease bank capital. C) decrease bank profits and increase bank capital. D) decrease bank profits and decrease bank capital.
The definition of the adult population is those who are 16 years and older and who are
A) employed or unemployed. B) in the labor force. C) in the labor force or not in the labor force. D) not in the labor force.