Suppose the banking system has $100,000 in outstanding deposits and actual reserves of $35,000. If the required reserve ratio is 25 percent, the maximum amount the banking system can now add to the money supply is:
A. $25,000.
B. $10,000.
C. $40,000.
D. $50,000.
Answer: C
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A. rule of force B. rule of one C. rule of man D. rule of law
An industry in which economies of scale allow one firm to supply the entire market at the lowest possible cost is called a
A) legal monopoly. B) natural monopoly. C) single-price monopoly. D) one-firm monopoly.
Which of the following is not a limitation of the Pareto criteria?
a. Almost any policy change will make at least one person worse off. b. The status quo is lent legitimacy from being the starting point for evaluating social welfare. c. The criteria cannot tell us if a particular policy change will make all participants better off. d. The criteria do not allow for the ranking of all possible states of the world.
Which term describes an especially lengthy and deep recession?
a. peak b. depression c. recession d. trough