Answer the following questions true (T) or false (F)
1. Your checking account balance is included in your bank's assets.
2. Consider the following T-account for a bank:
Assets Liabilities
Reserves $1,000 Deposits $5,000
Loans $4,000
If the required reserve ratio is 20 percent, the bank at this point can make no more loans.
3. Consider the following T-account for a bank:
Assets Liabilities
Reserves $1,000 Deposits $5,000
Loans $4,000
If the required reserve ratio is 10 percent, the bank at this point can make no more loans.
1. FALSE
2. TRUE
3. FALSE
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With identical firms, constant input prices, and all the other characteristics of a competitive market
A) the long run equilibrium price is the minimum of the average cost curve. B) a shift in demand will change the equilibrium price and quantity. C) the long run and short run equilibria are identical. D) Both A and B.
Which two factors make regulating mergers complicated?
A) First, firms may lobby government officials to influence their decision to approve the merger. Second, by the time the government officials reach a decision regarding the merger, the firms often decide not to merge. B) First, the time it takes to reach a decision to approve a merger is so long that the firms often have new owners and mangers. Second, by law, government officials are not allowed to consider the impact of foreign trade (exports and imports) on the degree of competition in the markets of the merged firms. C) First, the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice must both approve mergers. Second, the concentration ratios that are used to evaluate the degree of competition the merged firms face are flawed. D) First, it is not always clear what market firms are in. Second, the newly merged firm might be more efficient than the merging firms were individually.