Suppose American Bank has $500 in deposits and $200 in reserves and that the required reserve ratio is 10%. In this situation, American bank has
A. $50 in required reserves
B. $50 in excess reserves
C. $200 in required reserves
Ans: A. $50 in required reserves
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An example of a government policy to increase physical capital formation is:
A. the provision of publicly-funded education. B. the construction of an interstate highway system. C. government support for basic research. D. maintaining a well-functioning legal system.
Which of the following describes actual trends in the U.S. labor force participation rate?
A) The labor force participation rate of adult men has risen since 1950. B) The labor force participation rate of adult women has risen since 1950. C) The labor force participation rate of adult men not in school, but too young to retire has risen since 1950. D) The labor force participation rate of adult women has fallen since 1950. E) The labor force participation rate of all adults has fallen since 1950.
In the year that a bakery buys a new $100,000 oven by borrowing at a real interest rate of 5 percent, the oven adds $22,000 to bread sales, depreciates by $8000, and requires $3000 in natural gas and maintenance
Since the MPK is ________ the user cost of capital, the bakery should ________. A) above, shut down the oven B) above, consider buying more ovens C) below, shut down the oven D) below, consider buying more ovens
Wage rate differentials between nations are likely to narrow as
a. the MRPs of workers in high-wage countries increase b. noncompeting labor markets become more prevalent c. workers move more freely to high-wage countries d. capital migrates to high-wage countries e. workers in high-wage countries become more educated