The reserve ratio is 20 percent. If the Fed buys $1 million of U.S. government securities from a bond dealer by transmitting the funds to the dealer?s deposit account at Bank ABC, then
A) Bank ABC can make no additional loans.
B) Bank ABC can make additional loans up to $800,000.
C) Bank ABC can make additional loans up to $1 million.
D) Bank ABC cannot make any additional loans, but the system as a whole can make additional loans up to $1 million.
Answer: B) Bank ABC can make additional loans up to $800,000.
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Refer to Table 3-1. The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi) and the rest of the market. At a price of $4, the quantity demanded in the market would be
A) 40 lbs. B) 70 lbs. C) 110 lbs. D) 150 lbs.
The procedure used to calculate the present value of future income is called
a. indirect production. b. investment tax shelter planning. c. discounting. d. amortizing.
Last year the imaginary nation of Panglossia had real GDP of 400 billion. This year it had real GDP of 472.5 billion. Which of the following changes in population is consistent with a 5 percent growth rate of real GDP per person over the last year?
a. The population decreased from 75 million to 72 million. b. The population decreased from 60 million to 50 million. c. The population increased from 70 million to 80 million. d. The population increased from 80 million to 90 million.
More flexible labor markets will shift
a. both the long-run Phillips curve and the long-run aggregate supply curve to the right. b. both the long-run Phillips curve and the long-run aggregate supply curve to the left. c. the long-run Phillips curve to the right and the long-run aggregate supply curve to the left. d. the long-run Phillips curve to the left and the long-run aggregate supply curve to the right.