The writing of a $1,000 check that is drawn on Bank A and deposited in Bank B

A. increases the money supply initially by $1,000.
B. reduces total reserves of Bank A by $1,000 and increases the total reserves of Bank B by the same amount.
C. reduces the required reserves of Bank A by $1,000 and increases the required reserves of Bank B by the same amount.
D. reduces the excess reserves of Bank A by $1,000 and increases the excess reserves of Bank B by the same amount.


B. reduces total reserves of Bank A by $1,000 and increases the total reserves of Bank B by the same amount.

Economics

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The surplus created by a price floor will likely be

A) smaller if the good is a necessity. B) larger if the good is addictive. C) smaller if the good is a luxury. D) unaffected by the time that has elapsed since the price ceiling is implemented. E) None of the above answers is correct.

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Small differences in annual growth rates of real GDP generate large differences in real GDP over time because of the:

A. diminishing returns to capital. B. importance of average labor productivity. C. limits of economic growth. D. power of compound interest.

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Economics