A bank's assets consist of $1,000,000 in total reserves, $2,100,000 in loans, and a building worth $1,200,000 . Its liabilities and capital consist of $3,000,000 in demand deposits and $1,300,000 in capital. If the required reserve ratio is 20 percent, what is the level of the bank's excess reserves? How much money could the excess reserves be used to create in the banking system as a result?
a. $600,000; $600,000
b. $600,000; $3,000,000
c. $400,000; $400,000
d. $400,000; $2,000,000
d
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A. Social Security retirement payments B. Medicare benefits for the elderly C. defense spending D. net interest paid on government debt held by the public
Every transaction concerning the importation of goods into the United States constitutes a
A. demand for dollars with no effect on markets for foreign currencies. B. demand for foreign currencies and a supply of dollars. C. supply of foreign currencies and a demand for dollars. D. supply of foreign currency with no effect on the market for the dollar.
__________ make(s) it easy for small savers to diversify their portfolios
A) Direct finance B) Traded securities C) Regulation Q D) Financial intermediaries
If Oscar's MPC is 0.95 and he earns an additional $2,000, how much would he spend?
a. $100 b. $1,900 c. $2,105 d. $40,000