The reserve ratio is 10% and a bank has $600,000 in transaction deposits. The amount of reserves equals
A) $6,000.
B) $60,000.
C) $600,000.
D) undeterminable without information on cash reserves.
B
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock. B. negative supply side shock. C. positive demand side shock. D. positive supply side shock.
Each member of the Board of Governors is appointed for a nonrenewable ________ term.
A. 14-year B. 7-year C. 12-year D. 4-year
Answer the following questions true (T) or false (F)
1. The total amount of producer surplus in a market is equal to the area below the supply curve. 2. Marginal cost is the additional cost to a firm of producing one more unit of a good or service. 3. Marginal benefit is the total benefit to a consumer from consuming one more unit of a good or service.