A bank receives new deposits equal to $200,000 and the desired reserve ratio is 10 percent. What is the amount of new loans the bank can make?
What will be an ideal response?
The bank can make new loans equal to the amount of its excess reserves. The bank's desired reserves equal ($200,000 ) × (0.10 ) = $20,000, leaving the bank with excess reserves of $180,000. As a result, the bank can make $180,000 in new loans.
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The difference between basic and applied research is that: a. basic research does not promote resource productivity while applied research does. b. applied research does not promote resource productivity while basic research does. c. basic research has less immediate payoff to society than applied research typically does. d. basic research occurs in science, while applied research occurs in
industry. e. only the government promotes basic research.
What is the expected payoff of an investment that yields $1,000,000 with a probability of 0.001 and $0 with a probability of 0.999?
A. $1,000,000 B. $1,000 C. $10,000 D. $500,000
While Schumpeter's view that clusters of innovations can set off an innovation cycle is quite different from the views held by real business cycle theorists, they both
a. believe that cycles are not inevitable but the result of historical accidents b. believe that cycles are inherent and inevitable c. they both focus their analyses on technological change d. view the interaction of the multiplier and accelerator as the key factor prolonging the innovation cycle e. advocate strong countercyclical fiscal policy as a means of creating a more stable growth path for the economy
Since a tariff can increase employment in an industry, the result is a net increase in total surplus
a. True b. False Indicate whether the statement is true or false