Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 20 percent
If the Federal Reserve reduces the required reserve ratio to 15 percent, then the bank will now have excess reserves of
A) $0. B) $5 million. C) $15 million. D) $20 million.
B
You might also like to view...
Which of the following can an economist predict with the most accuracy?
a. how Gwen will respond to an increase in the price of down jackets b. how Larry, Terry, and Mateo will respond to a decrease in the price of orange juice c. how a group of ten will respond to an increase in the price of motorcycles d. how a group of 100 will respond to a decrease in the price of cell phones
Credit cards are considered to be part of the money supply.
Answer the following statement true (T) or false (F)
Which of the following statements is true?
A. A tariff is a physical limit on the quantity of a good allowed to enter a country. B. An embargo is a tax on an imported good. C. A quota is a law that bars trade with another country. D. When a nation exports more than it imports it is running a balance of trade surplus.
Suppose the price of an item in a perfectly competitive market is $2. For a firm in this market, MC = MR at an output of 100 units. The average total cost at this output level is $4 per unit, and TVC is $80. We may conclude that
A) the firm should shut down because TC > TR. B) the firm should continue to produce because P>AVC. C) the firm should shut down because its TFC is $320 and its TC is $400. D) the firm should shut down because other firms will enter the industry as the market is perfectly competitive.