After the transaction in Table 13-1 is completed, what happens to actual reserves, required reserves, and excess reserves? Assume the required reserve ratio is 25 percent
a. Actual reserves increase by $10 million, required reserves increase $2.5 million, and excess reserves increase by $7.5 million.
b. Actual reserves decrease by $10 million, required reserves decrease $2.5 million, and excess reserves decrease by $7.5 million.
c. Actual reserves increase by $10 million, required reserves are unchanged, and excess reserves increase by $10 million.
d. Actual reserves decrease by $10 million, required reserves decrease by $10 million, and excess reserves are unchanged.
c
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Drivers who enter an expressway during the rush hour create negative externalities whenever they
A) could have taken another route. B) drive under the speed limit. C) fail to yield as they merge. D) have no other passengers in their vehicles. E) inadvertently slow down all the drivers behind them.
Refer to the above supply and demand graph. Point A represents the current equilibrium level of output of this product and point B represents the optimal level of output from society's perspective. If government decides to correct this externality with a subsidy to consumers, then the:
A. demand curve will shift from D2 to D1. B. demand curve will shift from D1 to D2. C. supply curve will shift from S1 to S2. D. supply curve will shift from S2 to S1.