If a bank had demand deposits of $50 million and it faced a 25 percent required reserve ratio, it would be able to have a maximum amount of how many dollars worth of loans?
a. $50 million
b. $37.5 million
c. $25 million
d. $12.5 million
b
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Suppose the world economy is composed of just two countries: Italy and Greece. Each can produce steel or chemicals, but at different levels of economic efficiency. The production possibilities frontiers for the two countries are shown in the graphs below.
Assume that prior to specialization and trade, Italy and Greece preferred points I and G on their respective production possibilities frontiers. As a result of complete specialization according to comparative advantage, the resulting gains in total output will be
A. 10 units of chemicals. B. 5 units of steel and 15 units of chemicals. C. 25 units of steel. D. 15 units of steel and 5 units of chemicals.
A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule:Production Possibilities ScheduleProductABCDEFSteel012345Wheat100907555300A change from combination C to B means that
A. 2 units of steel are given up to get 75 units of wheat. B. 1 unit of steel is given up to get 15 more units of wheat. C. 1 unit of steel is given up to get 75 units of wheat. D. 2 units of steel are given up to get 15 more units of wheat.
When the interest rate is above the equilibrium interest rate, there is an excess ________ money and the interest rate will ________
A) demand for; rise B) demand for; fall C) supply of; fall D) supply of; rise
If the price of hot dogs were to decrease, which of the following changes would we expect to occur in the hot dog bun market?
a. The equilibrium price of hot dog buns would decrease and the quantity of hot dog buns sold would increase. b. The equilibrium price of hot dog buns would increase and the quantity of hot dog buns sold would decrease. c. The equilibrium price of hot dog buns would increase and the quantity of hot dog buns sold would increase. d. The equilibrium price of hot dog buns would decrease and the quantity of hot dog buns sold would decrease. e. The equilibrium price of hot dog buns would stay the same and the quantity of hot dog buns sold would increase.