Assume the legal reserve ratio is 25 percent and the Fourth National Bank borrows $10,000 from the Federal Reserve Bank in its district. As a result:
A. commercial bank reserves are increased by $10,000.
B. the supply of money automatically declines by $7,500.
C. commercial bank reserves are increased by $7,500.
D. the supply of money is automatically increased by $10,000.
A. commercial bank reserves are increased by $10,000.
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The figure above shows the market for college education in the United States
If the government intervenes in the market and provides a subsidy to colleges to enroll the efficient number of students, the amount of the subsidy equals ________ per student. A) $5,000 B) $16,000 C) $13,000 D) $11,000 E) $7,000
Suppose on any given day there is an excess supply of reserves in the federal funds market
If the Federal Reserve wishes to keep the federal funds rate at its current level, then the appropriate action for the Federal Reserve to take is a ________ open market ________, everything else held constant. A) defensive; sale B) defensive; purchase C) dynamic; sale D) dynamic; purchase
In the simple accelerator theory an
A) increase in actual sales will always lead to an increase in investment. B) increase in actual output will not lead to an increase in expected sales. C) increase in actual sales will lead to an increase in replacement investment. D) increase in the size of the increase in actual sales will lead to an increase in next period's net investment.
In Dakistan, 3M people work, 0.5M are unemployed and get UI benefits, 0.1M are unemployed without UI benefits and 3M have no intention to work. The unemployment rate is (to the nearest %)
A) 7%. B) 9%. C) 14%. D) 17%.