Stealth bank holds deposits of $200 million. It holds reserves of $15 million. It has purchased government bonds worth $75 million. The current value of its loans, if sold at market value, is $130 million. What is the value of the Stealth bank’s liabilities?

If there is currently a shortage of dollars, which of the following would you expect to see in the foreign exchange market?

A) The dollar will appreciate. B) There will be an increase in the supply of dollars. C) There will be an increase in the demand for dollars. D) The dollar will depreciate.

The supply of loanable funds curve is

a. upward sloping because fewer people are persuaded to forgo current consumption as the interest rate rises b. downward sloping, showing that more investment will be undertaken as inflation decreases c. upward sloping because the opportunity cost of goods and services that must be forgone increases d. downward sloping, showing that as more funds are made available, the risk cost of loaning funds decreases e. usually horizontal