The reserve ratio is 20 percent. The Fed buys $1 million in government securities from a bond dealer by transmitting the funds to the dealer's deposit account at Bank A. Bank A makes the maximum loan possible to a construction company, which buys materials with the loan. The check is deposited in Bank B, which loans out all it can to a car dealership. To this point, the money supply has increased by
A. $3 million.
B. $1 million.
C. $1.8 million.
D. $2.44 million.
Answer: D
Economics
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Explain how some structural changes can increase the natural unemployment rate while other structural changes can decrease the natural unemployment rate
What will be an ideal response?
Economics
The figure above shows the market for coffee. If the efficient quantity of coffee is produced, the producer surplus is
A) $10 million. B) $20 million. C) $60 million. D) zero.
Economics