Suppose a banking system has $200 million in deposits, a required reserve ratio of 10 percent, and total bank reserves of $35 million. Then the potential increase in deposit creation for the whole banking system is equal to

What will a price ceiling that is non-binding do?

a) It will cause a surplus in the market. b) It will cause a shortage in the market. c) It will cause the market to be less efficient. d) It will have no effect on the market price.

Government failure is likely to occur for all of the following reasons except:

A. intervention in markets is always simpler than it initially seems. B. special interest groups might lobby government to the detriment of the public good. C. the bureaucratic nature of government intervention does not allow fine-tuning. D. individuals have better information about a situation that affects them than does government.