This topic contains a solution. Click here to go to the answer

Author Question: A bank's assets consist of 1,000,000 in total reserves, 2,100,000 in loans, and a building worth ... (Read 83 times)

DelorasTo

  • Hero Member
  • *****
  • Posts: 548
A bank's assets consist of 1,000,000 in total reserves, 2,100,000 in loans, and a building worth 1,200,000 . Its liabilities and capital consist of 3,000,000 in demand deposits and 1,300,000 in capital. If the bank is required to keep reserves equal to one-third of deposits, what is the level of the bank's excess reserves? How much money could the excess reserves be used to create in the banking system as a result?
 a. zero; zero
 b. 300,000; 300,000
 c. 300,000; 900,000
 d. 700,000; 2,100,000

Question 2

When aggregate demand declines unexpectedly and wage contracts are fixed, then the average price level will:
 a. increase and business firms will hire new workers.
  b. decline and firms will reduce wages.
  c. decline and business firms will lay off workers.
  d. increase and business firms will lay off workers.
  e. increase and business firms will increase wages.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Beatricemm

  • Sr. Member
  • ****
  • Posts: 323
Answer to Question 1

a

Answer to Question 2

c




DelorasTo

  • Member
  • Posts: 548
Reply 2 on: Jun 30, 2018
Thanks for the timely response, appreciate it


coreycathey

  • Member
  • Posts: 333
Reply 3 on: Yesterday
:D TYSM

 

Did you know?

Aspirin may benefit 11 different cancers, including those of the colon, pancreas, lungs, prostate, breasts, and leukemia.

Did you know?

Malaria mortality rates are falling. Increased malaria prevention and control measures have greatly improved these rates. Since 2000, malaria mortality rates have fallen globally by 60% among all age groups, and by 65% among children under age 5.

Did you know?

Acetaminophen (Tylenol) in overdose can seriously damage the liver. It should never be taken by people who use alcohol heavily; it can result in severe liver damage and even a condition requiring a liver transplant.

Did you know?

Thyroid conditions may make getting pregnant impossible.

Did you know?

Illicit drug use costs the United States approximately $181 billion every year.

For a complete list of videos, visit our video library