The following figures are for the banking system. Deposits at the central bank = 400 U.S. Government Securities = 600 Transactions Deposits = 1,700 Loans = 800 Stockholder's Equity = 70 Other Assets = 450 Other Liabilities = 380 Borrowing from the Federal Reserve = 250 Cash in the Vault = 150 The reserve ratio on transactions deposits = 10% Currency in circulation = 10 The monetary base equals:
a. 560
b. 1,700
c. A multiple of 80
d. Cannot be determined with this information.
e. 80
.A
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The problem of "free riders" arises in a society when goods
A) can't be provided exclusively to the people who pay for them. B) cease to be scarce. C) produced by government are provided to everyone. D) supplied by the private sector are paid for from tax revenue. E) wanted by everyone are priced too low.
A monopoly firm can make economic profit in the long run. A firm in monopolistic competition cannot. What creates this difference?
What will be an ideal response?
Assume that the economy has two sectors, milk and orange juice, and that both sectors are initially in long-run competitive equilibrium. Milk and orange juice are substitute goods
Trace the effects of a change in preferences that increases the demand for orange juice.
An economy that operates below its full-employment capacity experiences
a. disequilibrium b. unrealizable inflationary expectations c. a gap in aggregate demand d. an inflationary gap e. a recessionary gap