If the required reserve ratio is 20 percent and a bank has $100,000 in checkable deposits, then its:
a. required reserves are $500,000.
b. required reserves are $20,000.
c. assets are $500,000
d. liabilities are $500,000.
e. net worth is $500,000.
b
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Which of the following is NOT part of the monetary base?
A) currency B) reserves of depository institutions C) the public's checking deposits at commercial banks D) commercial banks' reserves.
When households increase their personal savings ________
A) investment decreases B) they are better able to cope with severe economic downturns C) interest rates are likely to rise, as well D) all of the above E) none of the above
A person covered by a generous insurance plan smokes more cigarettes than he does normally. This is an example of a: a. lemon problem
b. moral hazard. c. adverse selection. d. risk selection.
A logical explanation for recessions might be that households have suddenly altered their willingness to work. A problem with this explanation is
a. it is inconsistent with patterns of job searches during recessions b. the demand for labor rarely shifts c. the large number of women who entered the labor force in the last four decades d. it is inconsistent with the classical model e. the work ethic that is responsible for the decline in American vacations