Assume that Paris First National Bank is a thriving bank with deposits of $20 million. If the required reserve ratio is 20 percent and the bank is fully loaned out, the bank will keep what amount of required reserves?
a. $2 million.
b. $4 million.
c. $10 million.
d. $16 million.
e. $20 million.
b
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The money demand curve will shift when there is a change in the: a. unemployment rate
b. inflation rate. c. money supply. d. nominal interest rate. e. price level.
In most societies, resources are allocated by
a. a single central planner. b. a small number of central planners. c. those firms that use resources to provide goods and services. d. the combined actions of millions of households and firms.
The argument that many critics of free trade have suggested that genetic engineering of plants and animals could lead to accidental production of new diseases is the
A. protecting domestic jobs argument. B. environmental and safety argument. C. infant industry argument. D. national security argument.
The tools of monetary policy are
A) government spending, tax rates, and the required reserve ratio. B) open market operations, differential between the discount rate and the federal funds rate, and the required reserve ratio. C) open market operations, differential between the discount rate and the federal funds rate, and tax rates. D) open market operations, government spending, and the required reserve ratio.