Commercial banks ________ through making loans.
A. create money
B. conduct open market operations
C. decrease M1
D. change the reserve requirement
Answer: A
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Refer to Scenario 25-2. As a result of Kristy's deposit, checking account deposits in the banking system as a whole (including the original deposit) could eventually increase up to a maximum of
A) $8,000. B) $10,000. C) $50,000. D) $100,000.
Which of the following might lead banks to hold more reserves?
A. An increase in the demand for loanable funds B. A decrease in the legal reserve requirement C. Fear that customers will want to withdraw most of their deposits D. Fear that businesses may decide to borrow less to fund investments
Monetary policy is ________ it was in the past ________ the income effect of an interest rate change on consumption has increased.
A. more effective than; even though B. more effective than, because C. equally effective as; even though D. less effective than; because
Personal consumption expenditures only include expenditures for durable and nondurable goods and services.
Answer the following statement true (T) or false (F)