Author Question: In an attempt to reduce poaching of elephant ivory tusks, officials in Kenya burned illegally ... (Read 55 times)

mspears3 · **on:** Jun 30, 2018

In an attempt to reduce poaching of elephant ivory tusks, officials in Kenya burned illegally gathered ivory. Using your understanding of shifts in supply and demand, will this turn out to be a helpful or hurtful move on the Kenyan government's part?

Question 2

A bank's assets consist of 500,000 in total reserves, 1,600,000 in loans, and a building worth 1,200,000 . Its liabilities and capital consist of 2,000,000 in demand deposits and 1,300,000 in capital. If the required reserve ratio is 10 percent, 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. 200,000; 200,000
b. 200,000; 2,000,000
c. 300,000; 300,000
d. 300,000; 3,000,000

isabelt_18 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

The burning of the ivory causes the supply curve of ivory to shift to the left, thereby increasing the price of ivory in the marketplace. This policy may have the opposite effect from the one intended. Higher ivory prices will likely induce more poaching to occur by making it more profitable.

Answer to Question 2

d