Imagine that Odyssey National is a brand new bank, and that its required reserve ratio is 10 percent. If it accepts a $1,000 deposit, then its required reserves balance will be:
a. $0.
b. $90.
c. $100.
d. $900.
e. $910
c
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One key purpose of economic regulation is
A) to force a firm to produce at the point at which marginal cost equals marginal revenue. B) to control the quality of service provided by a monopolist. C) to control the price that regulated enterprises are allowed to charge. D) to focus on the impact of production on the environment and society, the working conditions under which goods and services are produced, and sometimes the physical attributes of goods.
If banks faced a 100 percent reserve requirement, a decrease in banking reserves of $4 million would: a. increase the money supply by $4 million
b. increase the money supply by $400 million. c. decrease the money supply by $4 million. d. decrease the money supply by $400 million.
Which of the following is a sound economic reason why the government should subsidize your college education?
A. To help the school's monopoly power over private schools. B. Third parties, other than yourself, benefit from you being educated. C. The profit motive would cause the private sector to overproduce education. D. It is too expensive.
The single currency project in the EU will be most successful if European labor is relatively
A) immobile. B) immobile and business cycles are not synchronized. C) mobile and business cycles are synchronized. D) mobile and business cycles are not synchronized.