Cash held by a bank in its vault is a part of the bank's
A. net worth.
B. money supply.
C. liabilities.
D. reserves.
Answer: D
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An increase in the money supply: a. will definitely result in inflation if unemployment is high and there is much unused industrial capacity. b. shifts the aggregate demand curve to the left
c. will probably result in inflation if the economy is fully employed. d. causes interest rates to rise.
Reserves demanded varies
a. inversely with both prices and output. b. inversely with prices and directly with output. c. directly with prices and inversely with output. d. directly with both prices and output.
Kroger's grocery chain wants to finance the purchase of a new warehouse. It decides to sell bonds
a. Kroger's plans to use equity financing and its action is part of the demand for loanable funds. b. Kroger's plans to use equity financing and its action is part of the supply of loanable funds. c. Kroger's plans to use debt financing and its action is part of the demand for loanable funds. d. Kroger's plans to use debt financing and its action is part of the supply of loanable funds.
By 1975, government expenditures were about ______ of GDP.
a. one-fourth b. one-third c. one-half d. two-thirds