The reserve ratio is 10 percent. If the bank receives a customer deposit of $100,000, then an immediate effect is
A) a reduction in the bank's total assets of exactly $10,000.
B) no change in the bank's total assets or total liabilities.
C) a reduction in the bank's total liabilities of exactly $10,000.
D) an increase in the bank's reserves of exactly $10,000.
D
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The stock market boom of the 1920s occurred in part because the demand for stocks increased. The source of this demand increase originated from whom?
(a) Ordinary workers who experienced rising wages and now had incentive to invest in the stock market, thus driving up stock prices. (b) The people in the upper income strata; they received a high percentage of the increase in realized income during the 1920s and invested much of it in the stock market. (c) Farmers who, finding agriculture increasingly unprofitable, began investing in the stock market rather than in farm land and equipment. (d) Foreign investors who were optimistic about America's future and accordingly invested in American stocks.
Other things being equal, an increase in U.S. interest rates would be likely to cause an increase in the capital account surplus or a decrease in the capital account deficit
a. True b. False Indicate whether the statement is true or false