Assume a simplified banking system in which all banks are subject to a uniform reserve requirement of 20 percent and checkable deposits are the only from of money. A bank that received a new checkable deposit of $10,000 would be able to extend new loans up to a maximum of:
a. $2,000 b. $8,000.
c. $9,000 d. $10,000.
b
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
The main advantage of using panel data over cross sectional data is that it
A) gives you more observations. B) allows you to analyze behavior across time but not across entities. C) allows you to control for some types of omitted variables without actually observing them. D) allows you to look up critical values in the standard normal distribution.
Because economists understand what things change GDP, they can predict recessions with a fair amount of accuracy
a. True b. False Indicate whether the statement is true or false
If we consider the period from 1973 to 2007, real wages were the lowest around the year
A. 1973. B. 1979. C. 1986. D. 1996.