A depositor places $10,000 in cash in a commercial bank, where the required reserve ratio is 10 percent. The bank sends the $10,000 to its Federal Reserve Bank. As a result, the actual reserves, required reserves, and excess reserves of the bank have been increased by:
A. $10,000, $9000, and $1000 respectively
B. $10,000, $500, and $4500 respectively
C. $10,000, $1000, and $9000 respectively
D. $1000, $10,000, and $9000 respectively
C. $10,000, $1000, and $9000 respectively
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Moving downward on a downward sloping linear demand curve, the absolute value of the price elasticity of demand
A) is constant. B) increases continuously. C) decreases continuously. D) may either increase or decrease.
Which of the following groups of economies appear to have both a political consensus to hold inflation low and the economic tools to do so?
a. middle-income economies b. high-income economies c. low- and middle income economies d. middle- and high-income economies
Suppose a fall in stock prices makes people feel poorer. The decrease in wealth would induce people to
a. decrease consumption, shown as a movement to the left along a given aggregate-demand curve. b. increase consumption, shown as a movement to the right along a given aggregate-demand curve. c. decrease consumption, shown by shifting the aggregate-demand curve to the left. d. increase consumption, shown by shifting the aggregate-demand curve to the right.
In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?
A. Expansion. B. Recession. C. Peak. D. Trough.