The concept of an optimal currency area arose from the debate over whether fixed or flexible exchange rates are better
Indicate whether the statement is true or false
True
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If the desired reserve ratio is 10 percent and there is no currency drain, then a $100 increase in the monetary base leads the banking system to increase the quantity of money by
A) $1,000. B) $400. C) $900. D) $110. E) $1,100.
An effective program used to fight transient poverty is:
A. unemployment insurance. B. health insurance. C. job training. D. All of these are effective at fighting transient poverty.
If a bank desires to hold no excess reserves, the reserve requirement is 8 percent, and it receives a new deposit of $500,
a. its required reserves increase by $40. b. its total reserves initially increase by $460. c. it will be able to make a new loan of up to $492. d. All of the above are correct.
In 2007, remittances from illegal immigrants in the United States to Mexico
A. continued to rise despite increased crackdowns on illegal immigration. B. continued to rise because of the decrease in enforcement of immigration laws. C. began to fall because of increased crackdowns on illegal immigration. D. began to fall despite a decrease in enforcement of immigration laws.