A bank receives a demand deposit of $1,000 . The bank loans out $600 of this deposit and increases its excess reserves by $300 . What is the legal reserve requirement?
a. 10 percent
b. 20 percent
c. 30 percent
d. 60 percent
A
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Those individuals 16 years of age and over who are working in a job or actively seeking employment are called:
A) the labor force. B) the employed. C) the unemployed. D) none of the above.
In a simplified banking system subject to a 25 percent required reserve ratio, a $1,000 open-market purchase by the Fed would cause the money supply to:
A. increase by $1,000. B. decrease by $1,000. C. decrease by $4,000. D. increase by $4,000.
A concentration ratio measures
A) the average size of the firms in the industry. B) the sales of the three largest firms in the industry minus the costs of these three largest firms in the industry. C) the share of industry sales accounted for by the largest firms in the industry. D) the excess capacity found in a particular oligopolistic industry.
A political leader suggesting that an economic downturn will be better dealt with by allowing the built-in stabilizers to work is referring to
A. Tax policy changes. B. Monetary policy. C. Discretionary Fiscal Policy. D. Nondiscretionary Fiscal Policy.