Consider the following T-account for National City Bank: ...

[cnetterville]

Consider the following T-account for National City Bank:
 
  Assets Liabilities
  Reserves 10,000 Deposits 100,000
  Loans 90,000
 
  If the required reserve ratio is lowered to 8 percent, how much can National City loan out?
  A) 10,000 B) 8,000 C) 2,000 D) 0

Question 2

During a deflationary period
 
  A) the nominal interest rate is less than the real interest rate.
  B) the real interest rate is less than the nominal interest rate.
  C) the nominal interest rate does not change.
  D) the price level rises.

[dantucker]

Answer to Question 1

C

Answer to Question 2

A

[cnetterville]

TYSM

[ktidd]

Excellent