Which of the following is true?
a. Actual reserves equal required reserves minus excess reserves
b. The predominant liability of virtually all banks is loans.
c. The lower the required reserve ratio, the larger the money multiplier.
d. If some banks choose not to lend all of their excess reserves, the total amount of money created by an initial cash deposit will be larger.
c
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Banks can obtain funds to make loans by borrowing reserves from other banks through the federal funds market
Indicate whether the statement is true or false
The reason that the Fisherman's Friend restaurant in Stonington, Maine had a monopoly on selling seafood dinners in that town is most likely due to
A) no competitors apparently found the profit level attractive enough to enter the market. B) the restaurant owned all the fresh seafood in the state. C) a government-imposed barrier. D) occupational licensing.
Which of the following statements is true with respect to a tariff on imported cheese?
A. It lowers the price of cheese. B. It lowers domestic cheese producers' profits. C. It creates tax revenues for the government. D. It cannot result in retaliation.
Exhibit 2-6 Production possibilities curve data A B C D E F Capital goods150 140 120 90 50 0 Consumer goods 0 20 40 60 80 100 In Exhibit 2-6, the concept of increasing opportunity costs is represented by the fact that:
A. the quantity of capital goods produced must be less than 150. B. the quantity of consumer goods is constant for each change in the quantity of capital goods produced. C. greater amounts of capital goods must be sacrificed to produce each additional unit of consumer goods. D. the amount of consumer goods produced must be greater than zero.