Initially a bank has a required reserve ratio of 10 percent and no excess reserves. If $1,000 is deposited into the bank, then, ceteris paribus,
A. Required reserves will increase by $1,000.
B. Total reserves will increase by $900.
C. This bank can increase its loans by $1,000.
D. This bank can increase its loans by $900.
Answer: D
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Monopolistic competition in long-run equilibrium is characterized by
a. excess capacity. b. higher cost per unit of output than under perfect competition. c. inefficiency in use of resources. d. All of the above are correct.
Suppose there are 100 firms in a perfectly competitive market. Each firm supplies 100 units of output when price is $5, and so market quantity supplied is ________ when price is $5 . Each firm supplies 150 units of output when price is $7, and so market quantity supplied is ________ when price is $7
a. 100; 150 b. 10,000; 15,000 c. 500; 1,050 d. 50; 700
Central banks can use monetary policy to
What will be an ideal response?
The purely competitive firm's supply curve:
A. is upward sloping when some inputs are fixed. B. is perfectly inelastic in the short run. C. is horizontal in the long run. D. becomes less elastic in the long run.