If the reserve requirement is 10 percent, and banks keep no excess reserves, an increase in an initial $300 into the banking system will cause an increase in total money of:
A. $3,000.
B. $30,000.
C. $300.
D. $30.
Answer: A
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During 2009, General Motors announced that it would close its Saturn facilities in the United States because of the foreign competition it faced. This corporate move
A) increased structural unemployment. B) increased avoidable unemployment. C) increased cyclical unemployment. D) had no impact on unemployment. E) decreased frictional unemployment.
A bank can actually create money by
a. lending its required reserves. b. ordering newly printed money from the Fed. c. lending its excess reserves. d. None of these.
When supply for an item is perfectly inelastic, how does the supply change when there is a steep drop in price?
a. increases b. decreases c. does not change d. is eliminated
If the federal funds rate falls below the Fed's target range, the Fed could take:
A. an offensive action and sell government bonds. B. an offensive action and buy government bonds. C. a defensive action and sell government bonds. D. a defensive action and buy government bonds.