If the desired reserve ratio is 3 percent and deposits totaled $575 billion, banks would hold
A) $534.75 in reserves.
B) $17.25 billion in excess reserves.
C) $1,725 billion in currency.
D) $17.25 billion in reserves.
D
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The Fed would be pursuing a contractionary monetary policy if it was
A) selling bonds in the open market. B) lowering the differential between the discount rate and the federal funds rate. C) selling dollars in foreign exchange markets. D) lowering the reserve requirement.
The table above shows the marginal benefit from providing police protection in a community of two people, Jake and Elwood. Police protection is a public good
a) What is the marginal social benefit to community from the 4th police car on duty? b) If the marginal social cost of a police car on duty is $37, what is the efficient number of cars on duty? c) If the marginal social cost of a police car on duty is $70, what is the efficient number of cars on duty?