Answer the following statements true (T) or false (F)
1. If banks had $10 million in legal reserves, $110 million in check able deposits, and a 10 percent reserve requirement, they would have to reduce check able deposits by $10 million or increase reserves by $1 million.
2. A decrease in reserve requirements immediately increases the money supply.
3. The total check able deposits a bank may have can be determined by dividing its reserves by the reserve requirement.
4. The most liquid measure of the U.S. money supply is M1.
5. Federal Reserve banks stand ready to convert dollars into gold upon demand.
6. The Treasury issues all paper currency today.
1. TRUE
2. FALSE
3. TRUE
4. TRUE
5. FALSE
6. FALSE
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Consider the production function for bottled water. All of the following would be considered variable inputs except:
A) the plastic bottles. B) the water the bottles are filled with. C) the machine used to fill each bottle. D) the electricity used to power the machine used to fill the bottles.
The apparent conflict between the time-series and cross-section evidence on the U.S
saving ratio, where cross-section studies predict a long-run ________ in the ratio that does not emerge from the time-series studies, is ________ by the permanent-income and life-cycle hypotheses. A) rise, resolved B) rise, created C) fall, resolved D) fall, created
Price ceilings are designed to protect sellers, while price floors are designed to protect buyers
a. True b. False Indicate whether the statement is true or false
Answer the following question based on the information given below: Deposits at the central bank = 400 U.S. Government Securities = 600 Checking Deposit = 1,700 Loans = 800 Stockholder's Equity = 70 Other Assets = 450 Other Liabilities = 380 Borrowing from the central bank = 250 Cash in the Vault = 150 If the reserve requirement is 10%, the level of excess reserves equals:
a. 495 b. 310 c. 550 d. 380 e. Cannot be determined with this information.