When a bank's excess reserves are zero:
a. its required reserves exceed its legal reserves.
b. its liabilities exceed its assets.
c. its liabilities must be lower than its assets.
d. its required reserves equal its legal reserves.
e. it cannot meet its reserve requirement.
Question 2
Suppose the equilibrium price of bread is 2.00 per loaf. If the government sets a price ceiling of 1.50 per loaf:
a. the equilibrium price of wheat will fall and a shortage of wheat will be created.
b. the quantity of wheat supplied will increase.
c. the quantity of wheat demanded will decrease.
d. there will be a shortage of bread.
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