First National Bank has zero excess reserves. Ceteris paribus, if the required reserve ratio increases, which of the following will happen immediately?
A. The bank will not have enough required reserves.
B. The bank will have excess reserves.
C. Bank assets will increase.
D. Total reserves will increase.
Answer: A
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The above figure shows Jane's budget line and two of her indifference curves. If the price of a lobster dinner falls so that Jane can now purchase the combination represented by Point B, Jane would experience
A) an increase in the opportunity cost of a lobster dinner. B) no change in her marginal rate of substitution. C) an income and a substitution effect. D) Both answers B and C are correct.
If the Fed wants to increase the interest rate, it will
a. buy bonds and increase the money supply. b. buy bonds and decrease the money supply. c. sell bonds and increase the money supply. d. sell bonds and decrease the money supply. e. sell bonds and increase money demand.
International trade:
A. Raises the prices that consumers pay. B. Reduces competition. C. Makes a country weak. D. Increases consumption possibilities.
The coupon rate on newly issued bonds is usually higher for bonds with ________ terms and ________ risk that the borrower will go bankrupt.
A. longer; greater B. shorter; smaller C. shorter; greater D. longer; smaller