Suppose a transaction changes a bank's balance sheet as indicated in the following T-account, and the required reserve ratio is 10 percent.
Assets Liabilities
Reserves + 2,000 Deposits + 2,000
As a result of the transaction, the bank can make a maximum loan of
A) 0. B) 200. C) 1,800. D) 2,000.
Ques. 2When prices are rising, which of the following will be true?
A) The real interest rate will be lower than the nominal interest rate.
B) The real interest rate will be higher than the nominal interest rate.
C) The real interest rate will be negative.
D) The nominal interest rate will be negative.
Ques. 3In 1973, the Club of Rome published a book titled The Limits to Growth, which predicted that economic growth would likely end in high-income countries because of
A) increasing pollution and the depletion of natural resources.
B) rapid increases in government debt.
C) declining populations.
D) increases in outsourcing of the production of goods and services to low-income countries.
Ques. 4Refer to Figure 23-2. If the U.S. economy is currently at point K, which of the following could cause it to move to point N?
A) Household wealth declines.
B) The price level in the United States falls relative to the price level in other countries.
C) The interest rate rises.
D) Congress abolishes investment tax incentives.
Ques. 5What is the marginal productivity theory of income distribution?
What will be an ideal response?
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