If a bank has $1 million in demand deposits, $350,000 in reserves, and faces a 30 percent reserve requirement, the amount of money that a bank could initially create by loaning out their excess reserves is:
a. $50,000

Ricky is thinking about borrowing $10,000 from Fred. He promises Fred cash flows of $5000 for the next three years. If Fred's cost of capital is 10%, what is the Net Present Value of the investment for Fred?

a. -$126.55 b. $1,342.76 c. $2,434.26 d. -$1,322.31

A trade deficit experienced by a country during a year generally signals the poor health of the economy

a. True b. False Indicate whether the statement is true or false