Suppose the reserve requirement ratio is 20 percent. Assuming no bank holds excess reserves and nobody withdraws cash, a $10,000 injection of new reserves by the Fed can create:
a. $2,000 in new checkable deposits
b. $10,000 in new checkable deposits.
c. $50,000 in new checkable deposits.
d. $500,000 in new checkable deposits.
e. $5,000 in cash.
c
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An economy has two workers, Jen and Rich. Everyday they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. To maximize total output, Jen should specialize in producing ________ while Rich should specialize in producing ________.
A. TVs; TVs B. radios; both goods C. radios; TVs D. TVs; radios
Who has a higher bargaining power if the demand for the good being transacted is price-elastic?
What will be an ideal response?
A shortage occurs at any price above the equilibrium price.
a. true b. false
If a bank receives a $7,500 deposit and the required reserve ratio is 20%, how much of this deposit can be loaned out?
a) $1,500 b) $2,000 c) $6,000 d) $7,500