Assume that the Paris First National Bank currently has deposits of $20 million. If the current required reserve ratio is raised from 20 percent to 40 percent, then:
a. Paris First National Bank does not have to comply with the Federal Reserve mandate.
b. required reserves will decrease from $16 million to $12 million.
c. excess reserves will automatically increase by $20 million.
d. Paris First National Bank must close out 4 million in loans.
e. Paris First National Bank must increase its required reserves from $4 million to $8 million.
e
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In the United States the real wages of the least-skilled, least educated workers have ________ and the wages of best-educated, highest skilled workers have ________.
A. increased; increased B. declined; remained constant C. increased; declined D. declined; increased
A busy country store is the only producer and distributor of maple sausages in New Hampshire. It calculates that if it sets MR = MC, it will sell 2,000 sausages at a price of $10 and make a total economic profit of $6,000 . Instead, the store decides to charge a price of $8 . We can infer that the store
a. is lowering the price so that it can earn more than $6,000 total profit b. is operating in a contestable market so it is pricing the sausages to keep out competition c. will now sell fewer sausages according to the law of demand d. is now operating at a loss of $1 per sausage e. hopes that its demand is inelastic so that total revenue will increase
When new firms have an incentive to enter a competitive market, their entry will
a. increase the price of the product. b. drive down profits of existing firms in the market. c. shift the market supply curve to the left. d. increase demand for the product.
The basic difference between macroeconomics and microeconomics is that
What will be an ideal response?