Answer the next question based on the following consolidated balance sheet for the commercial banking system. Assume the required reserve ratio is 12 percent. All figures are in billions of dollars.AssetsLiabilities & Net WorthReserves$60 Checkable Deposits$150Loans100 Stock Shares135Securities25 Property100?Refer to the above data. If the commercial banking system actually loans the maximum amount it is able to lend, excess reserves will fall:
A. by $22 billion.
B. by $28 billion.
C. by $20 billion.
D. to zero.
Answer: D
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a. the LM curve will get steeper. b. the IS curve will get steeper. c. the LM curve will become vertical. d. the LM curve will become horizontal. e. none of the above.
Economists disagree on most economic issues facing an economy.
Answer the following statement true (T) or false (F)
Requiring that borrowers put up collateral to obtain a loan is a tool designed to treat:
A. the lemons problem. B. the free-rider problem. C. the problem of moral hazard. D. the problem of adverse selection.
In perfectly competitive markets with identical firms, the burden of a tax is shared by consumers and producers in the short run so long as market demand is not perfectly elastic.
Answer the following statement true (T) or false (F)