Assume we have a simplified banking system in balance-sheet equilibrium. Also assume that all banks are subject to a uniform 10 percent reserve requirement and demand deposits are the only form of money. A commercial bank receiving a new demand deposit of $100 would be able to extend new loans in the amount of:
A. $10.
B. $90.
C. $100.
D. $1,000.
Answer: B
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When the demand for an imperfect competitor's product is greater than it planned, the firm will
A) increase the price of the product until supply equals demand. B) meet the demand at its set price. C) reduce the price until supply equals demand. D) allow a shortage of the product to develop, without changing the product's price.
Suppose Lily's indifference curves are defined as U = ?FS + ?FH, where FS is consumption during sunny weather and FH is consumption during a hurricane. Lily receives 64 units of food when it is sunny and 16 units of food when there is a hurricane. What is the certainty equivalent of the expected food consumption bundle if the probability of sunshine is ? = 0.5?
A. 6 B. 12 C. 25 D. 36
If the U.S. demand for British pounds increases,
a. the dollar price of a British pound will increase b. the dollar price of a British pound will decrease c. the exchange rate between dollars and pounds will be out of equilibrium d. the pound will fall in value against the dollar e. there will be no change in either the value of the dollar or the pound
As noted in the text, which of the following was used by Nintendo to control the video game market?
a. a natural monopoly b. economies of scale c. a government franchise d. exclusive licensing