Author Question: Serious natural disasters like hurricanes and tornadoes cause widespread and extensive damage to ... (Read 201 times)

melly21297 · **on:** Jun 30, 2018

Serious natural disasters like hurricanes and tornadoes cause widespread and extensive damage to buildings. As a result of a natural disaster, what would you expect to happen in the market for building supplies?

Question 2

Say the required reserve ratio is 10 percent. If you pay back a loan of 20,000 a bank had previously made to you, the act of paying back the loan:
a. adds 2,000 in bank reserves.
b. adds 20,000 in bank reserves.
c. eliminates 2,000 in bank reserves.
d. eliminates 20,000 in bank reserves.

sultana.d · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

As homes and buildings are being reconstructed, the demand for building supplies will increase significantly. The increase in demand causes a movement along the supply curve, resulting in an increased quantity of building supplies traded. Prices will rise.

Answer to Question 2

b