The desired reserve ratio is 10 percent. Fly By Night Bank has deposits of $250,000 and reserves of $25,000. What is the amount of its excess reserves?
What will be an ideal response?
The bank has no excess reserves. It wants to have ($250,000 ) × (0.10 ) = $25,000 as reserves. Its actual reserves equal $25,000. Therefore its excess reserves equal $25,000 - $25,000, or $0.
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The theory of PPP suggests that if one country's price level falls relative to another's, its currency should
A) depreciate. B) appreciate. C) float. D) do none of the above.
Suppose Acme and Mega produce and sell identical products and face zero marginal and average cost. Below is the market demand curve for their product. 
If Acme and Mega decide to collude and work together as a monopolist with each firm producing half the quantity demanded by the market at the monopoly price, then what will be Mega's economic profit?
A. $150 B. $50 C. $100 D. $0