Studying money and banking through five core principles is helpful because:
A. studies have shown students have a difficult time remembering more than five topics.
B. money and banking can undergo drastic changes overtime, but the five principles do not.
C. everything in economics can be reduced to five core principles.
D. these five principles are understood by everyone.
Answer: B
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Which of the following is the BEST example of a common resource?
A) a can of Mountain Dew B) fish in the ocean C) cable television D) national defense
Assume that the Paris First National Bank currently has deposits of $20 million. If the current required reserve ratio is raised from 20 percent to 40 percent, then:
a. Paris First National Bank does not have to comply with the Federal Reserve mandate. b. required reserves will decrease from $16 million to $12 million. c. excess reserves will automatically increase by $20 million. d. Paris First National Bank must close out 4 million in loans. e. Paris First National Bank must increase its required reserves from $4 million to $8 million.