Author Question: Demand tends to be more elastic, the greater the number of good substitutes, the greater the ... (Read 109 times)

fagboi · **on:** Jun 30, 2018

Demand tends to be more elastic, the greater the number of good substitutes, the greater the fraction of one's income devoted to a product and the greater the time allowed to respond to a price change.
a. True
b. False
Indicate whether the statement is true or false

Question 2

Assume that the reserve requirement is 20 percent. First National Bank has vault cash and deposits with the Fed of 80 million, loans and securities of 320 million, and demand deposits of 400 million. First National:
a. could extend a maximum of 40 million of additional loans.
b. could extend a maximum of 20 million of additional loans.
c. could extend a maximum of 10 million of additional loans.
d. is not in a position to extend additional loans.