Which of the following is false?
a. The money supply will tend to rise when the Fed pays a lower interest rate on bank reserves
b. If banks never wanted to hold excess reserves, decreasing the interest rate the Fed pays on reserves would increase the money supply.
c. If banks hold excess reserves, the actual money multiplier would be less than potential money expansion.
d. All of the above are true
b
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Consider the following T-account for a bank:
Assets Liabilities Reserves $1,000 Deposits $5,000 Loans $4,000 If the required reserve ratio is 20 percent and the bank is holding no excess reserves, the bank at this point can make no more loans.
If a worker receives a weekly nominal wage of $300 and the CPI is 125, the real wage is approximately
a. $210. Cc. $200. d. $300.
Economists define capital as the
a. accumulation of goods produced in the past that are being used in the present to produce new goods and services. b. goods and services that are most affected by changes in technology. c. factors of production that can be rented by firms. d. factors of production that can be purchased by firms.
Stagflation refers to a situation in which the economy is experiencing:
A. high economic growth and high inflation. B. low economic growth and high inflation. C. high economic growth and low inflation. D. low economic growth and low inflation.