Table 16-3. -Refer to Table 16-3. Starting from the Situation as Depicted

question 262

Multiple Choice

Table 16-3.
-Refer to Table 16-3. Starting from the situation as depicted by the T-account, if someone deposits $500 into the First Bank of Fairfield, and if the bank makes new loans so as to keep its reserve ratio unchanged, then the amount of new loans that it makes will be

• A)$320.
• B)$400.
• C)$680.
• D)$750.

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Definitions:

Consumer Goods

Products and services that are purchased or consumed by individuals for personal or household use.

Capital Goods

Long-lasting goods that are used to produce other goods or services and are not sold directly to consumers.

Law of Increasing Opportunity Costs

states that as production of one good increases, the opportunity cost of producing an additional unit of this good also increases, due to factors of production not being perfectly interchangeable.

Satisfy Wants

The process of fulfilling the desires or needs of consumers through the provision of goods and services.