Would the maximum loan that a bank can make be different when receiving a discount loan from the Federal Reserve of $1 million versus receiving a checking account deposit of $1 million? Explain why or why not
What will be an ideal response?
They are different. Both increase the reserves at the bank by $1 million, but the bank does not have to hold required reserves against the discount loan because it is not a deposit. The entire $1 million of the discount loan is excess reserves, which the bank can loan out.
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Transactions accounts allow for direct payment to a third party.
Answer the following statement true (T) or false (F)
Figure 4-24
Refer to . The amount of deadweight loss associated with the tax is equal to
a.
P3 A C P1.
b.
A B C.
c.
P2 A D P3.
d.
P1 D C P2.
The highest income quintile receives about ______% of all income.
Fill in the blank(s) with the appropriate word(s).
To answer the following question, please refer to the figure below. Concentrating only at the lower left quadrant, discuss the relationship between the U.S. real money supply and the dollar/euro exchange rate, E$/E
What will be an ideal response?