Assume total reserves are $1 million, check able deposits are $5 million, and the reserve requirement is 10 percent. What are the excess reserves?

a. $4 million
b. $6 million
c. $1 million
d. $500,000


d. $500,000

Economics

You might also like to view...

The marginal cost curve of pollution abatement is

A) downward sloping. B) upward sloping. C) horizontal. D) vertical.

Economics

A citizen in a developing country with a currency policy of convertibility on the current account could engage in all of the following transactions except:

A. sell foreign currency resulting from the exports of manufactured t-shirts. B. sell foreign currency resulting from the sale of a U.S. treasury bond. C. purchase foreign currency in order to import a BMW. D. purchase foreign currency in order to purchase a U.S. treasury bond.

Economics

Which of the following statements is true?

(a) A barter system requires a double coincidence of wants; (b) Holding cash is a good way of preserving the value of assets; (c) Commercial banks must cover their deposits fully with cash reserves; (d) A fall in reserve requirements forces banks to curtail credit.

Economics

Refer to the information provided in Table 24.7 below to answer the question(s) that follow. Table 24.7All Numbers are in $ MillionRefer to Table 24.7. Assuming constant MPC, at income of $1,300 million, saving is $________ million, at income of $1,500 million, saving is $________ million.

A. 190; 230 B. 170; 210 C. 180; 220 D. 195; 235

Economics