If banks' desired reserve ratio increases from 0.10 to 0.15, the public still desires to hold the same amount of currency, and the Fed takes no actions, the money supply will:
A. decrease.
B. not change.
C. either increase or decrease.
D. increase.
Answer: A
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According to classical macroeconomic theory, changes in the money supply change real GDP but not the price level
a. True b. False Indicate whether the statement is true or false
If a country takes advantage of the comparative advantage of some resources over others, its production possibility curve is likely to be:
A. bowed outward. B. straight. C. flat. D. bowed inward.
Exhibit 8-1 Disposable income and consumption data Disposable Income(Y) Consumption(C) 0 500 1,000 1,400 2,000 2,200 3,000 2,900 4,000 3,500 5,000 4,000 In Exhibit 8-1, when disposable income is increased from $2,000 to $3,000 to $4,000, the marginal propensity to consume
A. remains constant. B. increases from 0.6 to 0.7. C. decreases from 0.8 to 0.7. D. decreases from 0.7 to 0.6.
Wheat is produced in a perfectly competitive market. Market demand for wheat increases. This will cause the individual wheat farmer's marginal revenue to ________ and their profit-maximizing level of output to ________.
A. increase; increase B. increase; decrease C. decrease; increase D. decrease; decrease