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
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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.
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
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.
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