Suppose a bank has $850 million in vault cash and a deposit in the Fed of $100 million. If the bank's required reserves equal $500 million, then the bank has excess reserves of:
a. $100 million.
b. $350 million.
c. $400 million.
d. $450 million.
e. $500 million.
d
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Why, then, do macroeconomists (and policymakers, and the general public) care so much about the business cycle?
Adam Smith believed that through division of labor and specialization, producers could significantly increase their output. This is an example of a(n) ______.
a. aggregate b. resource c. correlation d. theory
Keynes argued that the downward slope of the demand for money curve depends on the:
A. equation of exchange. B. rate of interest. C. federal funds rate. D. discount rate.
If the income elasticity of a good is greater than zero, we say that the good is a:
A. normal good. B. inferior good. C. complementary good. D. substitute good.