Citizens Bank confronts a reserve requirement of 20 percent and currently holds millions of dollars in excess reserves. If a depositor withdraws $35,000 . the excess reserves of the bank will
a. decline by $7,000.
b. decline by $35,000.
c. decline by $28,000.
d. increase by $7,000.
C
You might also like to view...
If you spend more of your income on consumption goods, which of the following will occur?
A) Economic growth will be stimulated. B) For every dollar you spend on consumption, real GDP will fall by a dollar. C) Investments in education will rise. D) The production of investment goods will fall.
Why is it that only a small percentage of American firms are incorporated?
a. Corporate debt as stockholder's liability. b. Small size of firms. c. Unlimited liability. d. Inability to outlast associated individuals.
A 7.25 percent sales tax
A. Is a regressive tax because poor individuals consume a higher percentage of their income than high-income individuals. B. Does not impose an additional tax burden on most individuals because the sales tax is paid entirely by the seller. C. Is a progressive tax because high-income individuals buy more goods and services than low-income individuals. D. Is a proportional tax because the rate is the same for all income groups.
Refer to the data. Suppose that entry into the industry changes this firm's demand schedule from columns (1) and (3) shown to columns (2) and (3). Economic profit will:
A. fall by $10.
B. fall to $6.
C. increase by $10.
D. decline to zero.