If a bank has excess reserves greater than the amount of a deposit outflow, the outflow will result in equal reductions in
A) deposits and reserves.
B) deposits and loans.
C) capital and reserves.
D) capital and loans.
A
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Assume a nation has a fixed exchange rate, and the central bank decreases the reserve requirement. What is the net effect on the money supply (given)? Answer assuming all the adjustments have worked their way through the macroeconomic system, and it is in equilibrium
a. The change in the money supply is ambiguous. b. The money supply can not change. This is an example of the "Impossible Trilogy." c. The money supply rises. d. The money supply falls.
The principal-agent problem is
A) often more severe for partnerships than for corporations. B) often less severe for partnerships than for corporations. C) severe for corporations but nonexistent for partnerships. D) most severe for sole proprietorships.