Sunday, August 9, 2009

Please help me with this economic homework!!?

1Suppose the reserve requirement is 10 percent. If a bank has $5 million of checkable deposits and actual reserves of $500,000, the bank:



a. can safely lend out $500,000. b. can safely lend out $5 million. c. can safely lend out $50,000 d. cannot safely lend out more money



2A Federal funds rate reduction that is caused by monetary policy will:



a. increase the prime interest rate. b. decrease the size of the monetary multiplier. c. increase the Fed%26#039;s discount rate. d. decrease the prime interest rate.



3Other things equal, if the supply of money is reduced:



a. the demand for money will increase. b. the interest rates will fall. c. bond prices will fall. d. investment spending will increase.



Please help me with this economic homework!!?loan company





a



c



c

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