Author Question: A bank has deposits of 100,000, reserves of 20,000, and loans of 80,000. If the desired reserve ... (Read 126 times)

anjilletteb · **on:** Jun 29, 2018

A bank has deposits of 100,000, reserves of 20,000, and loans of 80,000. If the desired reserve ratio is 10 percent, then its excess reserves are

A) 0.
B) 8,000.
C) 10,000.
D) 2,000.
E) 12,000.

Question 2

Do automatic fiscal stabilizers eliminate business cycles?

A) Yes
B) No, because they have no effect if the business cycle is the result of some unanticipated change
C) No, but they do moderate business cycles
D) No, they increase the likelihood that a business cycle occurs
E) No, they make business cycle fluctuations more severe