The reserve ratio is 10 percent. If the Fed buys $1 million of U.S. government securities from a bond dealer by transmitting the funds to the dealer's deposit account at Bank ABC, then
A. Bank ABC can make additional loans up to $900,000.
B. Bank ABC cannot make any additional loans, but the system as a whole can make additional loans up to $1 million.
C. Bank ABC can make no additional loans.
D. Bank ABC can make additional loans up to $1 million.
Answer: A
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If capital is fixed, but a firm varies labor
A) the firm stays on the same isoquant. B) the firm moves to a new isoquant. C) the firm might move to a new isoquant, depending on how much labor is added. D) the firm's output will be dependent on the marginal rate of technical substitution.
The price elasticity of demand for Rosie's Roses fresh flowers the week of Valentine's Day is 1.40 and is 2.25 other days of the year. If Rosie's Roses faces a constant marginal cost of $2 per rose, what is the profit-maximizing peak-load price to charge the week of Valentine's Day?
A) $7.00 B) $9.50 C) $3.60 D) $5.60
Today, the Gini coefficient of income inequality for the United States is about .5. In 1975, it had been about .4. What do these numbers tell us?
A. Wealth is distributed less equally than income. B. The number of rich people has fallen. C. The official definition of poverty has changed. D. Income has become more unequally distributed.
When would a profit-maximizing monopolist that operates with no government intervention choose to produce the competitive level of output?
What will be an ideal response?