Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 10 percent
If the Federal Reserve raises the required reserve ratio to 15 percent, then the bank will now have excess reserves of
A) $0. B) -$5 million. C) $5 million. D) $15 million.
B
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Because a competitive firm is a price taker, it faces a demand curve that is:
a. perfectly inelastic. b. relatively inelastic. c. relatively elastic. d. perfectly elastic.
If both supply and demand simultaneously decrease
A) the market clearing price definitely rises, and the equilibrium quantity definitely falls. B) the market clearing price definitely rises, and the effect on the equilibrium quantity is indeterminate. C) the market clearing price definitely falls, and the effect on the equilibrium quantity is indeterminate. D) the effect on the market clearing price is indeterminate, and the equilibrium quantity definitely falls.