If a bank's desired reserve-deposit ratio is 0.33 and it has deposit liabilities of $100 million and reserves of $50 million, it:
A. has the correct amount of reserves and outstanding loans.
B. has too few reserves and will reduce its lending.
C. has too many reserves and will increase its lending.
D. should increase the amount of its reserves.
Answer: C
You might also like to view...
In the above figure, if the interest rate is 3 percent per year, the quantity of money demanded is
A) greater than the quantity of money supplied, and the demand for money curve will shift. B) greater than the quantity of money supplied, and the supply of money curve will shift. C) less than the quantity of money supplied, and the demand for money curve will shift. D) greater than the quantity of money supplied, and the interest rate will change. E) less than the quantity of money supplied, and the interest rate will change.
From 1970 to 2006, data representing average real income for U.S. households indicates that the rich have ________ and the poor have ________
A) gotten richer; gotten poorer B) gotten richer; also gotten richer C) gotten richer; gotten neither richer nor poorer D) gotten poorer; also gotten poorer
A ________ person is indifferent to a bet that has zero expected value
A) risk-neutral B) risk-loving C) risk-averse D) rent-seeking
Bob plans to spend $60 per month on DVD movie rentals and CDs. The price of a movie rental is $3 and the price of a CD is $15. If Bob rents 5 DVDs per month, how many CDs can he buy?
A) 1 B) 2 C) 3 D) 4