Blackboard QUESTION 9 Ridley goes for a job interview at Exeter Corporation When

Question

Blackboard QUESTION 9 Ridley goes for a job interview at Exeter Corporation When she sts down with exists. O a moral hazard o b. adverse selection sits down with the hman r director, we might say that a situation of C. information temnc information QUESTION 10 If the required reserve ratio is 5% an initial demand de o a. $100,000 at made m a bank of S 100,000 can result in an expansion in the money supply of b.$1.000,000 C. $2.000.000. od $200,000 QUESTION 11 Whuch of the following qualifies as a liability to a bank? a A mortgage b. Demand deposits c A Treasury bond d A business loan QUESTION 12 Central Bank is the

Explanation / Answer

9.) This is a case of assymetric information as the HR director possesses more knowledge than Ridley.

Hence, Option-(c) is correct.

10.) Money Multiplier = Deposits/Reserve Required

                                   = 100,000/0.05

                                   = 2,000,000

Hence, Option-(c) is correct.

11.) Demand Deposit is a liability for the bank

This is because the money deposit by the people has to be returned to them after the committed period of deposit. Thus, it acts as a liability.

Hence, Option-(b) is correct.

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