The amount of currency in the economy is determined ultimately by the demands of the
a. commercial banks and the public
b. Board of Governors
c. District Federal Reserve Banks
d. District Federal Reserve Banks and commercial banks
e. Board of Governors and the District Federal Reserve Banks
A
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Normative economics
A) predicts the consequences of alternative actions. B) answers the question "What ought to be?" C) answers the question "What is?" D) is the focus of most modern economic reasoning.
Under the gold standard, if the dollar price of gold is pegged at $35 per ounce and the euro price of gold is pegged at 12 euro per ounce, what is the dollar/euro exchange rate?
What will be an ideal response?
The change in the money supply in an economy is measured as:
a. the difference between the government deficit and government borrowing. b. the sum of a change in high-powered money and the change in tax revenues. c. the difference between government borrowing and government spending. d. the ratio of the change in excess reserves to the deposit expansion multiplier. e. the change in the government budget deficit.
According to the circular-flow diagram, if Denny is the owner of a landscaping business and he just received $50 for mowing Mrs. Pendleton's lawn,
a. the $50 represents a cost of production for Denny's firm. b. the $50 represents wages, rent, and profit to Denny's firm. c. Denny acts as a firm who interacted in the markets for factors of production with Mrs. Pendleton. d. Denny acts as a firm who interacted in the markets for goods and services with Mrs. Pendleton.