If interest rates rise by 5 percentage points, say, from 10 to 15%, bank profits (measured using gap analysis) will

A) decline by $0.5 million.
B) decline by $1.5 million.
C) decline by $2.5 million.
D) increase by $1.5 million.


B

Economics

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Which of the following statements about explicit costs is true?

A. They usually exceed implicit costs. B. They are the only costs that matter to business owners. C. They appear on the firm's balance sheet. D. They are difficult to measure.

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According to the Application, recent reforms in Cuba have relied less on the free market in determining prices in the housing market

Indicate whether the statement is true or false

Economics

You have just read that the Federal Reserve has increased the money supply to avoid a recession. For a given price level, you would expect the LM curve to

A) shift up and to the left as the real money supply falls. B) shift up and to the left as the real money supply rises. C) shift down and to the right as the real money supply falls. D) shift down and to the right as the real money supply rises.

Economics

If the cross-elasticity of goods X and Y is positive, then the sales of X move:

A. in the opposite direction as the price of Y, and X and Y are substitute goods. B. in the opposite direction as the price of Y, and X and Y are complementary goods. C. in the same direction as the price of Y, and X and Y are substitute goods. D. in the same direction as the price of Y, and X and Y are complementary goods.

Economics