A commercial bank has $1,000,000 of outstanding demand deposits and actual reserves of $300,000 . If the required reserve ratio is 20 percent, what is the maximum amount of new loans the bank can extend?
a. zero
b. $100,000
c. $300,000
d. $700,000
b
You might also like to view...
Suppose the only characteristic of beer that a consumer cares about is alcohol content. Currently, Bud Light and Miller Lite both have the same alcohol content. a. Illustrate the consumer's indifference curves in a graph with ounces of Miller Lite on the horizontal and ounces of Bud Light on the vertical axis. b. Suppose that the producers of Bud Light lower the price of Bud Light. How will your answer to (a) change?
c. Suppose that the producers of Bud Light lower the alcohol content of their beer by 50%. How will your answer to (a) change? d. Since we identify tastes with indifference maps, would you say that the consumer's tastes have changed in (b) or (c)? e. How could we change the units we use to measure Miller Lite in order to get the indifference map in (c) to again look like the one in (a)? What will be an ideal response?
Nonfinancial businesses in Germany, Japan, and Canada raise most of their funds
A) by issuing stock. B) by issuing bonds. C) from nonbank loans. D) from bank loans.
Suppose the tax amount on the first $10,000 income is $0; $2000 on the next $20,000; $4000 on the next $20,000; $6000 on the next $30,000; and 40 percent on any income over $80,000. Family A has income of $30,000 and Family B has income of $80,000 What is the marginal and average tax rate for each family?
A) Family A: marginal—10 percent; average—6.7 percent; Family B: marginal—30 percent; average—15 percent. B) Family A: marginal—10 percent; average—20 percent; Family B: marginal—30 percent; average—23 percent. C) Family A: marginal—10 percent; average—10 percent; Family B: marginal—40 percent; average—40 percent. D) Family A: marginal—10 percent; average—15 percent; Family B: marginal—40 percent; average—20 percent.
Judy has just bought a car that is made in Germany. As far as the U.S. balance of payments is concerned this purchase is a(n)
A) accounting identity. B) special draw. C) surplus item. D) deficit item.