Use the Following to Answer Questions

question 75

Multiple Choice

Use the following to answer questions:
Suppose that the public holds 50% of the money supply in currency and the reserve requirement is 20%.Banks hold no excess reserves.A customer deposits $6000 in her chequable deposit.
-(Scenario: Holding Cash) Refer to Scenario: Holding Cash.As a result of the deposit,required reserves will increase by:

• A) $0.
• B) $1200.
• C) $3000.
• D) $6000.

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Definitions:

Increasing-Cost Industry

An increasing-cost industry is one in which costs of production increase as the industry expands, often due to factors like limited resources or higher input prices.

Long-Run Supply Curve

A graphical representation showing quantities of goods a firm is willing and able to supply at different prices over a long period, assuming all inputs are variable.

Decreasing-Cost Industry

Industry whose long-run supply curve is downward sloping.

Long-Run Industry Supply Curve

A graphical representation showing the relationship between the price of a good and the total output of the industry over time, accounting for adjustments in all input factors.