Refer to the given data. If the Fed increased the reserve requirement from 20 percent to 25 percent, a deficiency of reserves in the commercial banking system of _____ would occur and the monetary multiplier would fall to ____.
Answer the question on the basis of the following consolidated balance sheet of the commercial banking system. Assume that the reserve requirement is 20 percent. All figures are in billions and each question should be answered independently of changes specified in all preceding ones.
A. $50 billion; 5
B. $10 billion; 4
C. $50 billion; 4
D. $10 billion; 8
C. $50 billion; 4
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Funding for the operations of the Board of Governors of the Federal Reserve is derived from
A) taxes collected from commercial banks. B) the governments of the states in which the district banks operate. C) appropriations from the United States Congress. D) earnings of the Federal Reserve district banks.
If the supply of labor to a monopsonist is everywhere unit elastic, then the wage will equal
A) the marginal expenditure. B) one-half of the marginal expenditure. C) the marginal revenue product of labor. D) one.