If total reserves for a bank are $25,000, excess reserves are $5,000, and demand deposits are $100,000, the money multiplier must be
A. 10.
B. 5.
C. 25.
D. 20.
Answer: B
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Indicate whether the statement is true or false
One of the negative impacts of export subsidy is that:
a. the price of the domestic good increases in the world market. b. the domestic supply of the goods increases more than proportionately than increase in demand. c. the domestic cost of production of the exportable increase. d. it results in a general deflation and hence the domestic producers incur losses. e. the domestic consumers are harmed as the subsidies are financed by taxing them.
Which of the following statements about the FDIC is untrue?
a. The FDIC conducts bank audits and examinations. b. The FDIC helps prevent bank failures. c. The FDIC is owned by member banks. d. The FDIC provides demand deposit insurance for participating banks. e. The FDIC was created in 1933.
Which statement is true about the perfect competitor?
A. Firms operate at peak efficiency in the short run. B. Economic profits are greater than accounting profits. C. Firms that survive must make a profit in the long run. D. The demand curve is perfectly elastic for each firm.