A bank can safely lend only an amount equal to its excess reserves because
A) all of its reserves are now required reserves.
B) borrowers will spend the proceeds of their loans, and the bank will lose all of its excess reserves.
C) the excess reserves will fall to zero when the bank makes the loans.
D) This is not true since a bank can safely lend an amount equal to its total reserves.
B
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Jane owns a pizza joint. In the month of February, she sold 310 medium-base pizzas and 207 large-base pizzas. She charges $9 for a medium-base pizza and $12 for a large-base pizza. The total revenue earned by Jane in February is: a. $5,210
b. $4,284. c. $5,274. d. $10,857.
For an investor who starts with dollars and wants to end up with dollars in the future, which of the following choices is an example that includes speculating?
A. Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and then buy dollars at the future spot rate B. Buy a dollar-denominated financial asset C. Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and sign a forward exchange contract to buy dollars D. Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and sign a forward exchange contract to sell the foreign currency