In September 2007, Regions Bank held $3 million in reserves against M1 deposits and made $83 million in loans. Between September 2007 and September 2008, deposits decreased from $114 million to $95 million
If Regions Bank wants to maintain its desired reserve ratio in 2008, it will A) increase its reserves.
B) definitely make more loans.
C) cannot make more loans.
D) decrease its reserves.
D
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Leo's Bakery reduces the price of wheat bread from $3 to $1 and finds that quantity demanded increases from 100 to 122 loaves. Leo calculates that his price elasticity of demand for wheat bread is:
a. 0. b. 0.2. c. 1.0. d. 1.5. e. 2.0
While tax cuts may increase productivity, the government is forced to redistribute the tax burden or cut its own spending
a. True b. False
How are aggregate supply and stagflation related?
a. Stagflation usually causes an adverse shift in aggregate supply. b. An adverse supply shift usually causes stagflation. c. Stagflation only follows inflation, with no relation to aggregate supply. d. There is no relationship between the two.
Suppose a tax of $4 per unit is imposed on a good, and the tax causes the equilibrium quantity of the good to decrease from 2,000 units to 1,700 units. The tax decreases consumer surplus by $3,000 and decreases producer surplus by $4,400 . The deadweight loss of the tax is
a. $200. b. $400. c. $600. d. $1,200.