A commercial bank has checkable-deposit liabilities of $50,000 and a required-reserve ratio of 20%. What is the amount of required reserves?
A. $10,000
B. $250,000
C. $1 million
D. $50,000
Answer: A
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If the moral hazard problem in automobile driving were to be eliminated, the marginal cost of driving would be
A) lowered enough to pull the amount of driving back down to the efficient level. B) lowered enough to raise the amount of driving back up to the efficient level. C) raised enough to pull the amount of driving back down to the efficient level. D) raised enough to raise the amount of driving back up to the efficient level. E) lowered back down to the efficient level, relieving the stress on market forces.
A perfectly competitive employer of an input will maximize profits from the employment of the input by equating:
a. the value of the marginal product of the input with the price of the output. b. the marginal product of the last unit of the input employed with the input price. c. the input price with the price of the product produced. d. the marginal revenue product of the input with the input price. e. the marginal product of the last unit of the input employed with the price of the product produced.
The Phillips curve shows the trade-off between rates of inflation and rates of unemployment
Indicate whether the statement is true or false
Which of the following is an example of an international externality?
a. Ensuring biodiversity b. Promoting ecotourism c. Mandating recycling d. Implementing pollution taxes