If a Bank Desires to Hold No Excess Reserves, the Reserve

question 273

Multiple Choice

If a bank desires to hold no excess reserves, the reserve requirement is 5 percent, and it receives a new deposit of $1,000

• A)its required reserves increase by $50.
• B)its total reserves initially increase by $1,000.
• C)it will be able to make a new loan of up to $950.
• D)All of the above are correct.

Discuss the welfare implications of trade and trade policies for different stakeholders.

Use Edgeworth Box and other economic diagrams to explain resource allocation, trade possibilities, and efficiency.

Understand the concept of market failure and its causes.

Analyze the role of externalities in causing inefficient economic outcomes.