The money supply in Econland is 1,000, and currency held by the public equals bank reserves. The desired reserve/deposit ratio is 0.25. Bank reserves equal ________.
A. 250
B. 200
C. 500
D. 800
Answer: B
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A concentration ratio is used to
A) determine whether a market structure is oligopoly. B) determine the importance of labor in the production process. C) determine the degree of homogeneity in the market. D) see if a firm qualifies for federal assistance.
To solve the principle agency problem, which of the following questions should you ask a. Who is making the bad decision?
b. Does the decision maker have all the relevant information? c. Does the decision maker have the incentive to make the right decision? d. All of the above
A monopoly sets a market price that is higher than the marginal cost of production. This fact implies that a monopoly's allocation of resources is:
a. unfair. b. inefficient. c. discriminatory. d. excessive.
If the Fed lowers the discount rate at the same time it conducts an open market sale, it follows that
A) the money supply will fall. B) the money supply will rise. C) the money supply will remain unchanged. D) cash leakages will rise. E) There is not enough information to answer this question.