How will the purchase of $100 million of government securities by the Federal Reserve change bank reserves and total checking account deposits in the banking system as a whole? Assume that banks do not hold any excess reserves, that households and
firms do not change the amount of currency they hold, and that the required reserve ratio is 20 percent.
Bank reserves will increase by $100 million when the seller of the bond deposits the $100 million in its checking account. Total checking account deposits in the banking system as a whole will increase by $500 million — the $100 million increase in reserves times the simple deposit multiplier of 5.
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The world's economies can be divided into four main categories according to their annual per-capita income levels. Which one of the following is NOT one of the categories?
A) low-income B) upper middle-income C) high-income D) lower middle-income E) middle-income
The ratio of trade to GDP for the U.S. has roughly tripled since the 1960s
Indicate whether the statement is true or false
A shareholder in a corporation
A. is a part owner of the business. B. may not sell his or her share of ownership in the business without the business dissolving. C. is personally liable for the debts of the corporation. D. can earn interest, but not dividends, from the profits of the business.
Factors of production such as labor and capital
A. are complementary. B. can be complements and also substitutes. C. can be neither complements nor substitutes. D. are substitutable.