One problem with changing the required reserve ratio is that
a. the policy must be kept secret from the public in order to have any effect
b. the results are unpredictable
c. the changes are usually not effective
d. banks will often ignore the changes
e. it takes too much time for these changes to affect the economy
B
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The prices typically studied in microeconomics are
a. relative prices. b. absolute prices. c. money prices. d. retail prices.
If the interest rate is 10% then the net present value of these cash flows is
a. $1041.32 b. $541.32 c. $1090.91 d. $590.91
What is the relationship between household saving and taxes?
a. taxes = income - consumption - household saving b. household saving = income + taxes - consumption c. taxes = income + consumption + household saving d. household saving = consumption + income - taxes e. taxes = household saving - income + consumption
Assume that the loans made by the Paris First National Bank contracted from $16 million to $12 million. If the legal reserve requirement was increased from 20 percent to 40 percent, how much would the money supply shrink?
a. $5 million b. $10 million c. $15 million d. $20 million e. $24 million