A bank's reserve ratio is 10 percent and the bank has $5,000 in deposits. Its reserves amount to
a. $50.
b. $500.
c. $4,500.
d. $4,950.
b
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If a tariff is imposed on imports of shrimp into the United States, U.S. consumer surplus from shrimp will ________ and U.S. total surplus from shrimp will ________
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease E) increase; not change
The Fed buys securities and gives a bond dealer a check for the amount. After the check has cleared
A. reserves remain unchanged because the increase of reserves at the dealer's bank are offset by an increase in reserves at the Fed. B. reserves have fallen by the amount of the reserves times the reserve ratio and the money supply increases by the difference between the amount of the check and the increase in the reserves. C. reserves have fallen by the amount of the check because the Fed clears the check by reducing the bank's deposits at the Fed. D. reserves have risen by the amount of the check because the Fed clears the check by increasing the amount of the bank's deposits with the Fed.
Which of the following is NOT a proposition of the Heckscher-Ohlin model?
A) A country has a comparative advantage in the production of that commodity which uses more intensively the country's more abundant resource. B) The effect of international trade is to tend to equalize factor prices between the trading nations. C) If Mexico is an unskilled labor abundant country, then Mexico has a comparative advantage in the production of goods that use unskilled labor more intensively. D) If the United States is a skilled labor abundant country, then the United States has a comparative advantage in the production of goods that use skilled labor more intensively. E) Countries will completely specialize in the product in which they have a comparative advantage if free trade is allowed to occur.
Describe the role of government policies in determining the natural rate of unemployment in a country