Suppose that the Federal Reserve issued bonds in the amount of $45 million and the reserve requirement was 10%, what would be the resulting change to the monetary base?
A) $45 million
B) $450 million
C) $4.5 million
D) The bond issuance would not impact the monetary base only the money stock.
A
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Refer to Figure 19-7. At what level should the Indian government peg its currency to the dollar to make U.S. imports cheaper in India?
A) less than $.02/rupee B) equal to $.02/rupee C) greater than $.02/rupee D) $1/rupee
If the market price in a competitive market is below the minimum of average variable cost, the firm will shut down
Indicate whether the statement is true or false
Capitalism is the economic system that best describes what is currently happening in the world economy
Indicate whether the statement is true or false
Refer to the graph shown. In the graph, if the price level is P1 and the aggregate demand curve is AD0 then the economy is:
A. in an inflationary gap. B. in a recessionary gap. C. fully employed. D. in a long-run equilibrium.