If a bank has total reserves of $40,000 and a 20 percent reserve requirement, then the maximum amount of demand deposits the bank can have if excess reserves are zero is

a. $100,000
b. $80,000
c. $300,000
d. $20,000
e. $200,000


E

Economics

You might also like to view...

Under which of the following conditions will there be no substitution bias in the CPI?

A) Indifference curves are convex. B) Indifference curves are L-shaped. C) Indifference curves are linear. D) Indifference curves are downward sloping.

Economics

If a union threatens to strike during a slow demand period, it is more likely to

a. Have its conditions accepted b. Have its conditions rejected c. Get laughed at d. All of the above

Economics

If the MPS in an economy is .4, government could shift the aggregate demand curve leftward by $50 billion by:

A. reducing government expenditures by $125 billion. B. reducing government expenditures by $20 billion. C. increasing taxes by $50 billion. D. increasing taxes by $250 billion.

Economics

In the graph above, a government imposed price of $10 represents a price _____ and there is a _____.


A. floor; surplus
B. floor; shortage
C. ceiling; surplus
D. ceiling; shortage

Economics