When a bank makes a loan by crediting the borrower's checking account balance with an amount equal to the loan:
A. money is created.
B. the bank immediately loses reserves.
C. the bank gains new reserves.
D. the Fed has made an open-market purchase.
Answer: A
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Suppose real GDP for a country is $13 trillion in 2015, $14 trillion in 2016, $15 trillion in 2017, and $16 trillion in 2018. Over this time period, the real GDP growth rate is
A) increasing. B) decreasing. C) constant. D) negative.
Suppose that there are five bottles of lemonade, each of which gives a consumer the same level of utility. According to the law of diminishing marginal utility, how can the consumer receive the highest utility?
a. Consume all five bottles in the next hour b. Consume all five bottles today c. Consume all five bottles in one day next week d. Consume two bottles today and three tomorrow e. Consume one bottle each day for the next five days
An investment tax credit will lead to
a. a lower equilibrium interest rate in equilibrium b. a decrease in household consumption spending in equilibrium c. slower economic growth d. lower equilibrium investment in physical capital e. a increase in household consumption spending
Market equilibrium occurs at that price for which
a. quantity supplied equals quantity demanded b. cost equals the wages to labor c. the surplus quantity drives increased demand d. quantity supplied exceeds quantity demanded e. quantity supplied is less than quantity demanded