If the reserve ratio is 15 percent and a bank receives a new deposit of $1500, this bank 1) must increase its required reserves by $225. 2) will initially see its total reserves increase by $1500. 3) will be able to make a new loan of $1275. 4) All of the above are true. image 1

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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If the reserve ratio is 15 percent and a bank receives a new deposit of $1500, this
bank
1) must increase its required reserves by $225.
2) will initially see its total reserves increase by $1500.
3) will be able to make a new loan of $1275.
4) All of the above are true.
image 1
Transcribed Image Text:If the reserve ratio is 15 percent and a bank receives a new deposit of $1500, this bank 1) must increase its required reserves by $225. 2) will initially see its total reserves increase by $1500. 3) will be able to make a new loan of $1275. 4) All of the above are true. image 1
A stock market bust leads to a decrease in wealth in the economy. What happens to
equilibrium price and RGDP in the economy?
1) Equilibrium price and equilibrium RGDP increase.
2) Equilibrium price and equilibrium RGDP decrease.
3) Equilibrium price will rise and equilibrium RGDP will fall.
4) Equilibrium price will fall and equilibrium RGDP will rise.
image 2
Transcribed Image Text:A stock market bust leads to a decrease in wealth in the economy. What happens to equilibrium price and RGDP in the economy? 1) Equilibrium price and equilibrium RGDP increase. 2) Equilibrium price and equilibrium RGDP decrease. 3) Equilibrium price will rise and equilibrium RGDP will fall. 4) Equilibrium price will fall and equilibrium RGDP will rise. image 2
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