Suppose you withdraw $1,000 from your checking account. If the reserve requirement is 20 percent, how does this transaction affect the supply of money and the excess reserves of your bank?
a. There is no change in the supply of money; your bank's excess reserves are reduced by $800.
b. There is no change in the supply of money; your bank's excess reserves are reduced by $200.
c. The money supply increases by $1,000 . and the excess reserves of your bank are reduced by $800.
d. The money supply increases by $1,000 . and the excess reserves of your bank are reduced by $200.
A
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Increased United States military expenditures and action in response to the terrorist attacks of September 11, 2001 suggest that military officials in the United States _____
a. could not wait to go to war b. view the War on Terror as a negative externality c. believe that military expenditures can act as a deterrent d. are incompetent
Suppose the fixed cost of building a nuclear power plant is $1 billion. Suppose also that the only variable cost is the labor of Homer Simpson, and he earns $10 per hour. If the plant generates 1,000 kilowatts each hour, and has already generated 1 billion kilowatts, what can you say about the marginal cost of the next kilowatt?
a. The marginal cost is equal to $10 . b. The marginal cost is equal to $.01. c. The marginal cost is equal to $1.01. d. The marginal cost is rising. e. The marginal cost is falling.
What does a market do poorly?
A. Incentivize individuals to efficiently use society’s resources B. Price labor based actually on marginal productivity C. Promote equal income distribution D. Allocate resources to their highest value uses
If a firm sells 100 units of output at $15 per unit and 110 units of output when price is reduced to $12, its marginal revenue from selling the last unit is
A. $30. B. $180. C. -$30. D. -$180.