Assume that the required reserve ratio is 10 percent. A bank has deposits of $1,000,000 and cash of $500,000 in the Fed. The bank has demand deposits equal to $1,500,000. Given this information, the bank has excess reserves of
A) $850,000.
B) $350,000.
C) $1,350,000.
D) None of the above.
C
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The largest type of depository institution in the United States is
A) savings-and-loans. B) commercial banks. C) credit unions. D) mutual funds.
Given the evidence presented in the Applied Perspective on China's population policy, it appears that by decreasing the rate of population growth, China
a. is likely to experience slower economic growth in the future b. has been able to increase the size of its agricultural sector relative to the industrialsector c. has become one of the major grain exporters in the world d. will lag behind India in population in the coming years e. has been able to shift more resources into capital accumulation to promote future economic growth
If the prices of both goods increase by 10 percent, the budget line
a. shifts to the right in parallel fashion. b. shifts to the left in parallel fashion. c. is unaffected since only relative price changes matter. d. pivots on the axis of the more expensive good.
If people eventually adjust their inflation expectations so that in the long run actual and expected inflation are the same, then policymakers
a. can not exploit a tradeoff between inflation and unemployment in either the short or long run. b. can exploit a tradeoff between inflation and unemployment in the short run but not in the long run. c. can exploit a tradeoff between inflation and unemployment in both the short run and the long run. d. can exploit a tradeoff between inflation and unemployment in the long run, but not the short run.