When cash or coins are deposited in a transactions account at a bank, the money supply immediately increases by the amount of the deposit multiplied by the money multiplier.
Answer the following statement true (T) or false (F)
False
The process of deposit creation does not occur until the money is lent out to a new customer.
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The production possibilities frontier is the boundary between the
A) rational and irrational choices facing a society. B) wanted and unwanted combinations of goods and services. C) goods and services that the economy can produce. D) affordable and unaffordable combinations of production. E) attainable and unattainable combinations of goods and services.
Which of the following is a macroeconomic decision or concept?
A) the price of oil B) how many television sets to produce C) the unemployment rate for the entire economy D) the unemployment rate for each firm
Suppose the equilibrium price of milk is $3 per gallon but the federal government sets the market price at $4 per gallon. The market mechanism will force the milk price back down to $3 per gallon unless the government:
A) rations the excess demand for milk among consumers. B) buys the excess supply of milk and removes it from the market. C) Both A and B are plausible actions. D) The government cannot maintain the price above the equilibrium level.
If there is an increase in the demand for U.S. automobiles, the
A) demand for dollars will fall. B) demand for dollars will rise. C) supply of dollars will fall. D) supply of dollars will rise.