Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 20 percent
If the Federal Reserve reduces the required reserve ratio to 15 percent, then the bank will now have excess reserves of
A) $0. B) $5 million. C) $15 million. D) $20 million.
B
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Two identical firms that share a market and produce a homogeneous good will find which of the following market outcomes LEAST desirable?
A) Bertrand Oligopoly B) Cournot Oligopoly C) Cartel D) All are equally preferable.
Built-in stability means that:
A. an annually balanced budget will offset the procyclical tendencies created by state and local finance and thereby stabilize the economy. B. with given tax rates and expenditures policies, a rise in domestic income will reduce a budget deficit or produce a budget surplus while a decline in income will result in a deficit or a lower budget surplus. C. Congress will automatically change the tax structure and expenditure programs to correct upswings and downswings in business activity. D. government expenditures and tax receipts automatically balance over the business cycle,