When the required reserve ratio is 20 percent, the money multiplier is:
A. 0.2.
B. 2.
C. 2.5.
D. 5.
Answer: D
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Prices rose strongly during the Vietnam War (1964–1974), and only the adroit monetary and fiscal policy management of the Carter administration (1976–1980) managed to get inflation under control
Indicate whether the statement is true or false
Molly needs 30 minutes to wash the car and 45 minutes to mow the lawn. Renee needs 1 hour to wash the car and 2 hours to mow the lawn. Which of the following statements is correct?
a. Molly has an absolute advantage in washing the car; Renee has an absolute advantage in mowing the lawn. b. Molly has an absolute advantage in mowing the lawn; Renee has an absolute advantage in washing the car. c. Molly has an absolute advantage in both tasks. d. Renee has an absolute advantage in both tasks. e. Neither woman has an absolute advantage in washing the car.
Stagflation occurs when the economy experiences:
A. low unemployment and low inflation. B. high unemployment and rapid inflation. C. low unemployment and rapid inflation. D. high unemployment and low inflation.
Suppose the banks in the Federal Reserve System have $100 million in transactions accounts and the reserve requirement is 0.10. Ceteris paribus, if the reserve requirement is decreased to 0.07, then excess reserves will increase by:
A. $3 million. B. $7 million. C. $10 million. D. $700 billion.