Answer the next question based on the following consolidated balance sheet for the commercial banking system. Assume the required reserve ratio is 12 percent. All figures are in billions of dollars.AssetsLiabilities & Net WorthReserves$60 Checkable Deposits$150Loans100 Stock Shares135Securities25 Property100?Refer to the above data. The maximum amount by which the commercial banking system can expand the supply of money by lending is:
A. $450 billion.
B. $250 billion.
C. $350 billion.
D. $600 billion.
Answer: C
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The purpose of the restrictive debt covenant that prohibits borrowers from entering into certain types of leases is to
A. ensure a cash shortage does not cause an inability to meet current obligations. B. prevent liquidation of assets through large salary increases of key employees. C. protect the lender by controlling the risk and marketability of the borrower's security investments alternatives. D. limit the amount of fixed-payment obligations.
Moving from a point inside the production possibilities frontier to a point on the production possibilities frontier, the opportunity cost of producing more of the good on the horizontal axis
A) increases. B) is infinite. C) decreases. D) is 0. E) is constant.
An increase in U.S. demand for Japanese made cars (made in Japan) would, other things equal, increase the U.S. financial account surplus
a. true b. false
Suppose 3M pays a dividend of $2 per share which the investor is expected to receive immediately. The dividend is expected to grow by 5% per year and the investor has a required rate of return of 8%
What should be the current price of the stock according to the Gordon-Growth model?