Which of the following is an example of a bank's reserves?
A) currency held in the vaults of the bank
B) demand deposits with other member banks
C) U.S. Treasury bills
D) U.S. Treasury bonds
Ans: A) currency held in the vaults of the bank
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An increase in stock prices ________ the size of people's wealth and may ________ their willingness to spend, everything else held constant
A) increases; increase B) increases; decrease C) decreases; increase D) decreases; decrease
Compare Pareto optimality with the utilitarian view that says we are better off when the overall gain in utility exceeds the overall loss in utility by the consumers. What are the effects of the differences for policy? Can this concept be applied to public goods?
What will be an ideal response?
Expansionary policies are government policies that:
A. increase aggregate supply. B. decrease aggregate supply. C. decrease aggregate demand. D. increase aggregate demand.
If m equals the maximum number of new dollars that can be created for a single dollar of excess reserves and R equals the required reserve ratio, then for the banking system:
A. m = R - 1. B. R = m/1. C. R = m - 1. D. m = 1/R.