Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 10 percent. If the Federal Reserve reduces the required reserve ratio to 8 percent, then the bank can make a maximum loan of
A) $0. B) $2 million. C) $8 million. D) $10 million.
B
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Comparing the aggregate supply curve and the short-run Phillips curve, we see that they
A) both exist because real wage rate is fixed in the short run. B) both exist since money wages are flexible. C) each describe different parts of the economy. D) describe the same phenomena but contradict each other. E) both exist because money wage rate is fixed in the short run.
Higher expected profits and business confidence ________ investment spending
A) decrease B) increase C) do not affect D) none of the above.
If there is a mismatch between the skills of unemployed workers and the needs of employers, economists say that there is
A. structural unemployment. B. frictional unemployment. C. per capita unemployment. D. cyclical unemployment.
The slope of a nonlinear curve is ________ when the curve is rising, and ________ when the curve is falling
A) negative, positive B) negative, negative C) positive, negative D) positive, positive