Suppose a bank has checkable deposits of $100,000 and the required reserve ratio is 20 percent. If the bank currently has $100,000 in reserves, it could expand the money supply by as much as:
a. $100,000.
b. $400,000.
c. $0.
d. $20,000.
e. $80,000.
e
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Suppose that when the price of oranges is $3 per pound, the quantity demanded is 4.7 tons per day and the quantity supplied is 3.9 tons. In this case:
A. excess demand will lead the price of oranges to rise B. excess supply will lead the price of oranges to rise C. excess supply will lead the price of oranges to fall D. excess demand will lead the price of oranges to fall
Economists define a market to be competitive when the firms
A) spend large amounts of money on advertising to lure customers away from the competition. B) watch each other's behavior closely. C) are price takers. D) All of the above.
Economic surplus is another term for which of the following?
a. efficiency b. consumer surplus c. social surplus d. deadweight loss
According to the availability heuristic, which of the following will make Katie more likely believe that she will win a lot of money if she buys a lottery ticket?
A. The fact that it has been several years since she purchased a lottery ticket B. The fact that is has been several years since anyone has won the lottery C. Her boss hinting that she will soon receive a raise at work D. Watching a news report about someone winning 2 million dollars playing the lottery