When a bank receives a check drawn on an account from another commercial bank, the bank gains
A) capital equal to the amount of the check.
B) capital equal to the required reserve ratio times the amount of the check.
C) reserves equal to the amount of the check.
D) reserves equal to the required reserve ratio times the amount of the check.
C
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Why does the Fed have imperfect control over the money supply?
A. Because the Fed does not know how much reserves will change when it buys or sells securities. B. Because of unpredictable changes in the public’s desire to hold cash and banks’ desires to hold reserves. C. Because of unpredictable changes in reserve requirements. D. Because of the secrecy of FOMC meetings, which lead to policy surprises.
The graph shows the market for cell phones. The government imposes a sales tax on cell phones at $10 a cell phone. The excess burden of the sales tax on cell phones is
A) $20,000. B) $15,000. C) $35,000. D) $7,500. E) $30,000.
The above table shows some cost data for Tracey's Tents. What is the marginal cost of the 3rd tent?
A) $25 B) $20 C) $70 D) $120
The price of a good always changes when
A) either a shortage or a surplus occurs. B) quantity demanded and quantity supplied are constant. C) there is an increase in demand and an increase in supply. D) there is a decrease in demand and a decrease in supply.