If a bank receiving a new deposit of $200,000 would be able, as a result, to increase their lending by at most $150,000, then the required reserve ratio equals:
a. 4%

If the cost of capital decreases the isocost line will

A) stay the same. B) shift outward in parallel fashion. C) rotate outward around the point where only labor is employed in production. D) shift inward in parallel fashion.

When the rate of interest rises, the resulting change in the demand for capital is shown graphically by:

a. a movement down along the demand curve. b. a rightward shift of the demand curve. c. a leftward shift of the demand curve. d. a movement up along the demand curve. e. an outward rotation of the demand curve.