The supply of oil is more elastic than the demand for oil. If oil is taxed $10 per barrel, how will the tax be divided between the buyers and sellers?
A) The sellers will pay more of the tax than the buyers.
B) The buyers will pay more of the tax than the sellers.
C) The sellers and buyers will split the tax evenly.
D) The sellers will pay the entire tax.
B
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The desired reserve ratio is 10 percent. Joe deposits $1,000 in Bank A. Bank A keeps its minimum desired reserves and lends the excess to Fred. Fred spends his loan at J.C. Penney. J.C. Penney deposits the check it receives from Fred in Bank B
Bank B keeps its minimum desired reserves and lends the excess to Mary. How much can Bank B lend to Mary? A) $900 B) $90 C) $810 D) $100 E) $1,000
A narrow bid-asked spread on a security can be expected if
A) price fluctuations are large. B) liquidity costs are high. C) transactions volume is large. D) the market is thin.