A bank's assets consist of $1,000,000 in total reserves, $2,100,000 in loans, and a building worth $1,200,000 . Its liabilities and capital consist of $3,000,000 in demand deposits and $1,300,000 in capital. If the required reserve ratio is 20 percent, what is the level of the bank's excess reserves? How much could it loan out as a result?
a. $600,000; $600,000
b. $600,000; $3,000,000
c. $400,000; $400,000
d. $400,000; $2,000,000
c
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If expectations about future income change, there is
A) a decrease saving if people expect income to decrease in the future. B) a decrease in saving if people expect income to increase in the future. C) an increase in saving if people expect income to increase in the future. D) no change in saving until income actually changes. E) a change in the quantity of loanable funds supplied and a movement along the supply of loanable funds curve.
The model predicting victory in a two-person race for the candidate closer to occupying the center of the voter distribution is built on the assumption that
A) people always vote for the Democratic candidate if they are Democrats and for the Republican candidate if they are Republicans. B) people vote for the candidate who comes closer to matching their own views. C) most people don't vote unless the election is predicted to be close. D) none of the above
The ratio of money created by the lending activities of the banking system to the money created by the government's central bank is called the:
A. reserve ratio. B. money multiplier. C. demand deposits. D. federal funds.
Which of the following examples shows a price change in the most elastic range of a linear demand curve?
a. The price of CloseShave electric razors falls from $120 each to $100 each. b. The price of CloseShave electric razors falls from $100 each to $85 each. c. The price of CloseShave electric razors falls from $85 each to $80 each. d. The price of CloseShave electric razors increases from $80 each to $100 each.