Which of the following statements is correct?
A. The actual reserves of a commercial bank equal its excess reserves minus its required
reserves.
B. A bank's liabilities plus its net worth equal its assets.
C. When borrowers repay bank loans, the supply of money increases.
D. A single commercial bank can safely lend a multiple amount of its excess reserves.
Answer: B. A bank's liabilities plus its net worth equal its assets.
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In order for a barter transaction to be successful, there must be a
A) federal tax law in effect. B) high demand for a certain item. C) market for the goods. D) double coincidence of wants.
The standard cobweb model makes which two assumptions?
A. Workers are forward looking, and job adjustments are instantaneous. B. Workers are forward looking, and job adjustments take time. C. Workers are myopic, and job adjustments are instantaneous. D. Workers are myopic, and retraining of one's skills happens instantaneously. E. Workers are myopic, and job adjustments take time.
Free market economies
a. often have dirty air and rivers. b. acting on their own do not do enough to efficiently deal with externality problems. c. while not protecting the environment automatically do offer a powerful tool that may be used for that purpose. d. All of the above are correct.
In the open-economy macroeconomic model, if a country's supply of loanable funds shifts right, then
a. net capital outflow rises, so the exchange rate rises. b. net capital outflow rises, so the exchange rate falls. c. net capital outflow falls, so the exchange rate rises. d. net capital outflow falls, so the exchange rate falls.