Author Question: Suppose the reserve requirement is 10 percent and a person deposits 1,500 in a local bank. The local ... (Read 28 times)

itsmyluck · **on:** Jun 30, 2018

Suppose the reserve requirement is 10 percent and a person deposits 1,500 in a local bank. The local bank can now create a maximum of:
a. 150 in additional money, by lending 150.
b. 15,000 in additional money, by lending 15,000.
c. 1,500 in additional money, by lending 1,500.
d. 1,350 in additional money, by lending 1,350.
e. 135 in additional money, by lending 135.

Question 2

A price floor set above the equilibrium price is not binding.
a. True
b. False
Indicate whether the statement is true or false