If you deposit $20,000 in cash into a demand deposit account at a bank that faces an 18 percent required reserve ratio the result will be:
a. the bank will add $3,600 to its excess reserves.
b. the bank will add $16,400 to its excess reserves.
c. the bank will add $16,400 to its total reserves.
d. the bank will add $20,000 to its excess reserves.
b
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In practice
A) changes in national price levels often tell us relatively little about exchange rate movements. B) changes in national price levels raise the exchange rate. C) changes in national price levels lower the exchange rate. D) changes in national price levels often tell us about exchange rate movements. E) changes in national price levels match identical changes in the exchange rate.
Given an annual interest rate of 12 percent, what is the present value of receiving $1,000 in 20 years?
A) $890.45 B) $850.23 C) $112.16 D) $103.67
At a firm’s profit-maximizing level of output, its price is $200 and its short-run average total cost is $225. The firm
A. has a profit of $25 per unit of output. B. should shut down if its short-run average fixed cost is less than $25. C. has a loss of $100 per unit of output. D. should shut down if its short-run average variable cost exceeds $25.
When an individual firm in a competitive market decreases its production, it is likely that the market price will rise
a. True b. False Indicate whether the statement is true or false