Suppose the Fed requires banks to hold 9 percent of their deposits as reserves. A bank has $18,000 of excess reserves and then sells the Fed a Treasury bill for $9,000 . How much does this bank now have to lend out if it decides to hold only required reserves?
a. $27,000
b. $27,190
c. $26,190
d. $9,000
a
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If the cross price elasticity measured between items A and B is positive, the two products are referred to as:
a. complements b. substitutes c. inelastic as compared to each other d. both b and c e. a, b, and c
An increase in government regulation will shift
A. aggregate demand to the right. B. aggregate supply to the right. C. aggregate demand to the left. D. aggregate supply to the left.
Related to the Economic in Practice on p. 710: As corruption falls in a country, cost of production usually rises.
Answer the following statement true (T) or false (F)
According to the classical model, the income generated by production is
A) always insufficient to purchase all the goods and services produced. B) enough to purchase all the goods and services produced. C) fully spent on savings. D) enough to meet the needs of everyone in society.