The reserve ratio is 10 percent. Depositors regularly keep 10 percent of their deposits as cash. If the Fed buys $1 million of U.S. government securities, excess reserves
A) increase by $800,000.
B) increase by $810,000.
C) increase by $900,000.
D) increase by $1 million.
Answer: B) increase by $810,000.
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A single-price monopolist has the demand and marginal cost schedules given in the above table. What is the profit-maximizing level of output and price?
What will be an ideal response?
Suppose that you purchase a $5,000 bond that pays 7 percent interest annually and matures in five years. If you expect that the inflation rate during the next five years will be 2 percent annually, what real rate of return do you expect to earn?
a. 2 percent b. 5 percent c. 7 percent d. 9 percent
Economists account for changes in tastes for a good as:
A. irrelevant for the demand curve. B. shifts in the demand curve. C. not demonstrable on the demand curve. D. movements along the demand curve.
What do economists call a situation in which consumers buy a different quantity than they did before, at every price?
(A) A move along the demand curve. (B) A shift in size of the demand curve. (C) A change in expectations. (D) A change in demand.