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##### bank has a reserve requirement of 10%.

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A bank has a reserve requirement of 10%. This means that if a customer deposits \$10,000, the bank may lend;a - \$1000;b - \$9000;c - \$10,000;d - \$11,000;II) Expected inflation is 4%,nominal interest rates are 7%, the real interest rate is;a - 1%;b - 2%;c - 3%;d - 7%;III) Deficits & debt are often measured relative to GDP because;a - this method always makes them appear smaller;b - this method always makes them appear larger;c - the government's ability to repay the debt depends on GDP;d - the growth in GDP depends on the debt;IV) The US official poverty threshold is;a - 3 times the US Dept of Agriculture's minimum food budget;b - 3 times the US Dept of Housing's minimum housing allowance;c - the level of income earned by a person receiving minimum wage;d - the level of welfare benefits received by an eligible family;V) When people expect higher inflation, usually nominal interest rates will;a - fall;b - rise;c - remain unchanged;d - move erratically;VI) If the reserve ration is 0.08, the simple money multiplier is;a - 1;b - 8;c - 10.5;d - 12.5;(for each question I, II, etc pls select one answer - thanks!)

Paper#26883 | Written in 18-Jul-2015

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