If excess reserves are $10,000, demand deposits are $100,000, and the required reserve ratio is 10 percent, then total reserves are
A. $0.
B. $110,000.
C. $20,000.
D. $10,000.
Answer: C
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Supporters of globalization argue that increased globalization will lead to:
a. increased living standards. b. decreased budget deficits. c. decreased trade deficits. d. currency appreciation. e. monetary stability.
A consumption tax is usually collected on
a. wages and salaries. b. interest income. c. dividend income. d. None of these.
A homeowner discovers that a large tree in his yard is diseased and may fall in a bad windstorm and if it falls, it will likely destroy the garage. The cost to have the tree cut down is significant but the homeowner has an insurance policy and figures that if the tree falls and destroys the garage, the insurance company will pay, and the deductible is less than the cost to have the tree removed. This is an example of:
A. adverse selection. B. screening. C. moral hazard. D. information symmetry.
Refer to Scenario 19.2 below to answer the question(s) that follow.SCENARIO 19.2: An individual earning $40,000 pays $3,200 in taxes. The marginal tax rate on any income earned above $40,000 is 20%.Refer to Scenario 19.2. When this person earns $60,000, her tax payment would be
A. $4,000. B. $7,200 C. $12,000. D. indeterminate from this information.