Answer the question based on the following information on the banking system. Deposits at the central bank = 200 U.S. Government Securities = 600 Checking Deposits = 1,700 Loans = 800 Stockholder's Equity = 70 Other Assets = 450 Other Liabilities = 230 Borrowing from the central bank = 100 Cash in the Vault = 50 The reserve ratio on transactions deposits = 10% The banking system's excess reserves
equal:
a. 0
b. 134
c. a multiple of 250
d. 1,584
e. None of the above is correct
.E
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If a 5 percent increase in income leads to a 10 percent decrease in quantity demanded for a product, this product is
A) a necessity. B) an income elastic good. C) an inferior good. D) a luxury good.
Nonconventional monetary policy attempts to reduce financial frictions by ________
A) correcting the shortage of liquidity that has made it costly for businesses to invest B) purchasing long-term assets, which raises their price and reduces the credit spread C) reducing the expected future short-term interest rate D) all of the above E) none of the above
A public museum is an example of a
A) government-sponsored good. B) public good. C) good which generates a positive externality. D) good which generates a negative externality.
In this chapter, the discussion on competitive markets tells us that each firm's demand curve is horizontal. Is this not inconsistent with the industry's demand curve, which slopes downward?
What will be an ideal response?