A commercial bank has excess reserves of $10,000 and a required reserve ratio of 20%. It grants a loan of $8,000 to a customer, who then writes out a check for $8,000 that is deposited in another bank. The first bank will find its reserves decrease by:
A. $2,000
B. $3,000
C. $1,600
D. $8,000
D. $8,000
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For a government subsidy on a good with an external benefit to result in the efficient amount of output being produced, what must be done?
A) The size of marginal external benefit must be accurately determined. B) The government must produce the product. C) Private production and private consumption must both be directly subsidized. D) The quantity demanded must be decreased to the efficient amount. E) Private production without the subsidy must be prohibited.
Because many business situations are repeated games, firms may be able to avoid the prisoner's dilemma and implicitly collude to keep prices high
Indicate whether the statement is true or false
The confidence interval for a single coefficient in a multiple regression
A) makes little sense because the population parameter is unknown. B) should not be computed because there are other coefficients present in the model. C) contains information from a large number of hypothesis tests. D) should only be calculated if the regression R2 is identical to the adjusted R2.
A good or service that is forgone by choosing one alternative over another is called a(n):
a. explicit cost. b. opportunity cost. c. historical cost. d. accounting cost.