When part of a bank loan does not return to the banking system but rather remains outside the banking system as currency, then the money multiplier ________ in size and the amount of money created by an open market operation ________
A) increases; decreases
B) does not change; increases
C) decreases; decreases
D) increases; increases
E) decreases; does not change
C
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Accounting profit minus implicit costs equals:
A. explicit costs. B. economic profit. C. fixed costs. D. total revenues.
Which of the following expressions gives the present value of future dividends for a company whose current dividend is $5.00 and whose future dividends are expected to grow at rate g?
A) [$5.00(1 - g)]/(i - g) B) [$5.00(1 + g)]/(i + g) C) [$5.00(1 - g)]/(i + g) D) [$5.00(1 + g)]/(i - g)
The purchasing power parity theory is a good predictor of
a. all of the following b. the long-run tendencies between changes in the price level and the exchange rate of two countries c. interest rate differentials between two countries when there are strong barriers preventing trade between the two countries d. how intervention in exchange markets by central banks influences prices in various countries e. the day-to-day relationship between changes in the price level and the exchange rate of two countries
In short-run equilibrium, the quantities supplied and demanded of Real GDP can be less than or greater than Natural Real GDP
Indicate whether the statement is true or false