Assume that the commercial banking system has checkable deposits of $10 billion and excess reserves of $1 billion at a time when the reserve requirement is 20%. If the reserve requirement is now raised to 30%, the banking system then has ________.
A. excess reserves of only $.5 billion
B. excess reserves of $2 billion
C. a deficiency of reserves of $.5 billion
D. neither an excess nor a deficiency of reserves
Answer: D
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Which of the following is true?
i. The easier it is to find substitutes for a good, the more price elastic the demand for the good is. ii. The demand for a good is more price elastic the smaller the proportion of income spent on it. iii. If demand is price elastic, lowering the price leads to a decrease in total revenue. A) only i B) only ii C) only iii D) i and ii E) i and iii
The difference between a firm's revenue and its operating expenses is the firm's operating income
Indicate whether the statement is true or false
Which of the following would cause the short-run aggregate supply curve to shift to the right?
A) an increase in the price level B) a technological advance C) a decrease in inflation expectations D) an increase in interest rates
Everything else equal, the AC curve will shift downward if
A. input prices rise. B. input MPPs rise. C. output rises. D. output falls.