What happens when you withdraw cash from a bank?
A) The bank's reserves are reduced.
B) The bank's reserves are increased.
C) The bank's reserves are not affected.
D) The bank's total reserves remain unchanged but the composition of required reserves and excess reserves change.
Ans: A) The bank's reserves are reduced.
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Refer to Table 8.3 . Assume the price of labor is $5.00 and the price of capital is $10.00 and the firm's fixed costs are $15
What production technique will be used to produce the first unit of output? The second? The third? What are the firm's total variable costs, total costs, and marginal costs of producing one unit of output? Two units of output? Three units of output?
Fractional reserve banking
(a) destroys money. (b) requires banks to engage in 100 percent of total banking activities. (c) allows banks to create money while requiring them only to hold a fraction of money. (d) all of the above.