The balance sheet below is for the First Federal Bank. Assume the required reserve ratio is 20 percent.
Refer to the above information. If the original bank balance sheet was for the whole commercial banking system rather than a single bank, loans and deposits could have been expanded by a maximum of:
A. $40,000
B. $100,000
C. $200,000
D. $300,000
C. $200,000
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Which of the following is true?
a. A bondholder owes money to a corporation. b. A corporation owes money to a bondholder. c. A bondholder owns part of a corporation. d. A bondholder votes on company management.
In which of the following countries has economic growth been sufficiently high that income would double every ten years?
a. India b. Mexico c. South Korea d. Zimbabwe
Refer to the graphs, in which the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the level of investment spending associated with each curve. All figures are in billions. The economy is at point Z on the investment demand curve. Given these conditions, what policy should the monetary authorities pursue to achieve a noninflationary full-employment level of real GDP?
A. Decrease the reserve ratio
B. Decrease the discount rate
C. Sell government securities in the open market
D. Make no change in monetary policy
Relating to the Economics in Practice on page 362: The smart phone app which allows skiers at a slope to report weather conditions to others could be considered a form of
A. moral hazard. B. risk-loving. C. market signaling. D. asymmetric information.