In the simple deposit expansion model, if the required reserve ratio is 20 percent and the Fed increases reserves by $100, checkable deposits can potentially expand by
A) $100.
B) $250.
C) $500.
D) $1,000.
C
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If real GDP grows at 3 percent a year, the quantity of money grows at 5 percent a year, and the velocity of circulation is constant, then the price level must be
A) increasing at 8 percent a year. B) decreasing at 2 percent a year. C) increasing at 15 percent a year. D) increasing at 2 percent a year. E) decreasing at 8 percent a year.
Which of the following is true?
i. The easier it is to find substitutes for a good, the more price elastic the demand for the good is. ii. The demand for a good is more price elastic the smaller the proportion of income spent on it. iii. If demand is price elastic, lowering the price leads to a decrease in total revenue. A) only i B) only ii C) only iii D) i and ii E) i and iii
Which of the following is the largest component of M1?
A) traveler's checks B) savings deposits C) checking deposits D) currency
Marginal utility is
a. the difference in price between one store and another. b. the difference in value between "some" of a thing and "none" of a thing. c. the difference between any two successive total utility figures. d. acquired only with the first few units of a good or service. e. utility that is barely satisfactory.