Assume a new bank has just opened for business. It has deposits of $1,000,000 and a required reserve ratio of 15 percent. How much can this bank lend, and why?
What will be an ideal response?
This bank is required to hold 15 percent of deposits on reserve. In this case the amount of required reserves is $150,000. Total reserves equal to $1,000,000 minus required reserves give the bank $850,000 of excess reserves. The bank can lend all of its excess reserves or $850,000.
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Efficient production means producing:
a. less than feasible output for a given amount of resources. b. more than feasible output for a given amount of resources. c. the maximum feasible output for a given amount of resources. d. no more than what is needed. e. in excess of what is needed.
In a perfectly competitive market, firms are not restricted from entering or leaving an industry in response to profits or losses
Indicate whether the statement is true or false
Exhibit 4-11 Data on supply and demand Bushels demandedper month Price perbushel Bushels suppliedper month 45 $5 77 50 4 73 56 3 68 61 2 61 67 1 57 In Exhibit 4-11, the equilibrium price per bushel of wheat is:
A. $1. B. $2. C. $3. D. $4.
Bonnie volunteers to help make floral arrangements at a flower shop. She is an example of
A) entrepreneurial ability. B) labor. C) physical capital. D) human capital.