Suppose the banks in the Federal Reserve System have $400 million in transactions accounts and the reserve requirement is 0.10. Ceteris paribus, if the reserve requirement is decreased to 0.05, then excess reserves will increase by:
A. $1 million.
B. $20 million.
C. $40 million.
D. $2 billion.
B. $20 million.
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The financial crisis and recession which began in 2007
A) was only severe in the United States. B) impacted only low-income countries. C) had a global impact. D) impacted only high-income countries.
What are some of the forms that central planning has taken in developing nations today?
What will be an ideal response?
In August 2008, Ethan Nicholas developed the iShoot application for the Apple iPhone 3G, and within five months had earned $800,000 from this program. By May 2009, Nicholas had dropped the price from $4.99 to $1.99 in an attempt to maintain sales
This example indicates that in a competitive market A) earning an economic profit in the long run is extremely easy. B) economic profits are only earned in the long run. C) earning an economic profit in the long run is extremely difficult. D) it is impossible to earn an economic profit in either the short run or the long run.
How can specializing in lending help to reduce the adverse selection problem in lending?
What will be an ideal response?