When there is a reserve requirement, banks
a. must hold exactly the required quantity of reserves.
b. may hold more than, but not less than, the required quantity of reserves.
c. may hold less than, but not more than, the required quantity of reserves.
d. must seek the Fed's permission whenever they wish to expand or contract their loans to customers.
b
You might also like to view...
With average cost pricing, the monopolist
A) earns no accounting profit. B) produces where P = MC. C) earns a normal rate of return for its shareholders. D) does not cover opportunity costs.
Which of the following causes demand to be more elastic with respect to price?
A. Shorter periods of time to adjust to a change in price. B. A higher ratio of price to income. C. Fewer substitutes. D. A steeper demand curve for a given price and quantity.
Which of the following correctly describes the spending multiplier?
A. The initial change in consumption, investment, government spending, or net exports divided by the change in equilibrium GDP. B. An initial increase in aggregate expenditures divided by the equilibrium GDP. C. An initial increase in aggregate expenditures divided by the change in equilibrium GDP. D. The ratio of the change in real GDP to an initial change in any component of aggregate expenditures.
Assume that the opportunity cost for Germany to produce a jet is 50 cars. If Germany is producing on its production Possibility Frontier, some possible combinations of output for Germany could be:
A. (1,000 jets, 5,000 cars) and (900 jets, 10,000 cars). B. (2,500 jets, 2,000 cars) and (2,300 jets, 20,000 cars). C. (1,000 jets, 5,000 cars) and (900 jets, 15,000 cars). D. (2,500 jets, 2,000 cars) and (2,300 jets, 3,000 cars).