The Commerce Bank of Beverly Hills has total deposits of $1,000,000 and total reserves of $220,000. The desired reserve ratio is 10 percent. The bank's excess reserves are
A) $22,000.
B) $120,000.
C) $100,000.
D) $80,000.
E) $1,000,000.
B
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
Refer to Table 3-3. The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi) and the rest of the market. At a price of $4, the quantity demanded in the market would be
A) 40 lbs. B) 70 lbs. C) 110 lbs. D) 150 lbs.
The two most important categories of assets on the Fed's balance sheet are ________ and ________ because they earn interest
A) discount loans; coins B) securities; discount loans C) gold; coins D) cash items in the process of collection; SDR certificate accounts
Higher interest rates motivate:
A. firms to invest less in new factories and working capital. B. firms to invest more in new factories and working capital. C. individuals to spend more on consumption goods. D. individuals to spend more on capital goods.