If the Required Reserve Ratio (RRR) was 4%, how much money could a bank create from an initial deposit of €1270?
(a) €5,080.
(b) €50.80.
(c) €31,750.
(d) €1320.80.
Answer: (c) €31,750.
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Shifts in the IS curve ________ the AD curve, and changes to the reaction function ________ the AD curve
A) cause a movement along; shift B) shift; cause a movement along C) temporarily shift; permanently shift D) permanently shift; temporarily shift
If more and more labor is employed while keeping all other inputs constant, the marginal physical productivity of labor will eventually:
a. increase. b. decrease. c. remain constant. d. cannot tell from the information provided.
Imposing taxes in markets where demand and supply are price inelastic:
A. causes less inefficiency than imposing them in price-elastic markets. B. causes more inefficiency than imposing them in price-elastic markets. C. causes no inefficiency. D. cause the same amount of inefficiency because efficiency is unrelated to market elasticity.
If a profit-maximizing monopolist finds that marginal cost is increasing and exceeds marginal revenue, it should: a. increase output and decrease price. b. increase price and decrease output. c. decrease both price and output
d. increase both price and output.