Assuming all excess reserves are loaned out, currency holdings by the public are zero, and a reserve ratio of 20 percent, an initial deposit of $850 will lead to total deposits of
A) $425. B) $850. C) $4,250. D) $42,500.
C
You might also like to view...
A perpetuity that pays $250 per year at an interest rate of 4% would have a market price equal to
A) $6,250. B) $25,000. C) $2,500. D) $62,500.
Which of the following is true?
a. A budget deficit will reduce the national debt. b. A budget deficit will increase the national debt. c. A balanced budget will increase the national debt. d. A budget surplus will increase the national debt.
In the short-run framework, budget deficits should:
A. be run on a temporary basis whenever the economy is below potential output. B. be run on a permanent basis since they can always be financed by printing money. C. never be run since they slow economic growth over the long run. D. never be run since they crowd out investment in the short run.
A firm's supply curve is upsloping because:
A. the expansion of production necessitates the use of qualitatively inferior inputs. B. mass production economies are associated with larger levels of output. C. consumers envision a positive relationship between price and quality. D. beyond some point the production costs of additional units of output will rise.