Author Question: Suppose that the banking system currency has no excess reserves and that a bank receives a deposit ... (Read 106 times)

chandani · **on:** Jun 30, 2018

Suppose that the banking system currency has no excess reserves and that a bank receives a deposit into a checking account of 10,000 in currency.

If the required reserve ratio is 0.20, what is the maximum amount that the BANKING SYSTEM can lend out?
A) 8,000
B) 10,000
C) 40,000
D) 50,000

Question 2

The marginal product of capital (MPK) is given by the ________.

A) capital share of income + average output per unit of capital
B) capital share of income - average output per unit of capital
C) capital share of income average output per unit of capital
D) capital share of income average output per unit of capital
E) none of the above