A bank with a leverage ratio of 6.5 to 1 has
A) $6.50 in assets for every $1 in liabilities.
B) $6.50 in assets for every $1 in capital.
C) $1 in assets for every $6.50 in capital.
D) $1 in assets for every $6.50 in liabilities.
B
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The interest rate effect on aggregate demand indicates that a(n) ________.
A. decrease in the price level will decrease the demand for money, decrease interest rates, and increase consumption and investment spending B. increase in the supply of money will increase interest rates and decrease interest-sensitive consumption and investment spending C. increase in the price level will decrease the demand for money, reduce interest rates, and decrease consumption and investment spending D. decrease in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending
If people held all their money as cash:
A. money would lose its value as a store of wealth. B. money would no longer be a financial liability of the Fed. C. banks could not create money. D. banks would still be able to create money by making loans.
If the price of coffee increases from $2.50 per cup to $3.00 per cup and the quantity demanded goes down from 120 cups per week to 115 cups per week, the absolute value of price elasticity of demand in that price range is approximately
A. 2.34. B. 0.23. C. 4.35. D. 0.93.
If transaction costs are high, then it is more likely a firm's demand curve is downward sloping
Indicate whether the statement is true or false