Table 3 Hometown Bank Assets Liabilities Reserves $25,000 Deposits $150,000 Loans $125,000 Refer to Table 3. If the reserve requirement is 25 percent, this bank
A. has $10,000 of excess reserves.
B. needs $12,500 more reserves to meet its reserve requirements.
C. needs $2,500 more reserves to meet its reserve requirements.
D. just meets its reserve requirement.
Answer: B. needs $12,500 more reserves to meet its reserve requirements.
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Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $3, what changes in the market would result in an economically efficient output?
A) The price would decrease, the quantity supplied would increase, and the quantity demanded would decrease. B) The price would decrease, quantity demanded would increase, and quantity supplied would decrease. C) The price would decrease, the demand would increase, and the supply would decrease. D) The quantity supplied would decrease, the quantity demanded would increase, and the equilibrium price would decrease.
A horizontal merger is one in which the merging firms
a. are about the same size b. produce the same good in the same industry c. will control greater than 50 percent of the market d. have never directly competed in the past e. will double the concentration ratio in the industry