The money supply is 1,500 of which 500 is currency held by the public. Bank reserves are 200. The existing reserve/deposit ratio equals:
A. 0.15
B. 0.20
C. 0.10
D. 0.05
Answer: B
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If part of the labor force is unemployed, the foregone goods and services are
a. lost until the unemployed find jobs. b. are replaced by unemployment insurance. c. are lost forever. d. are replaced by an equal amount of imports.
Suppose that monetary neutrality and the Fisher effect both hold and the money supply growth rate has been the same for a long time. Other things the same a higher money supply growth would be associated with
a. both higher inflation and higher nominal interest rates. b. a higher inflation rate, but not higher nominal interest rates. c. a higher nominal interest rate, but not higher inflation. d. neither a higher inflation rate nor a higher nominal interest rate.
The imposition of an import quota shifts
a. the supply of currency right, so the exchange rate falls. b. the supply of currency left, so the exchange rate rises. c. the demand for currency right, so the exchange rate rises. d. the demand for currency left, so the exchange rate falls.
A problem with measuring the factor shares to determine scarcity or abundance is that:
a. it is very hard to count workers in some nations. b. estimates are very unreliable. c. the quantity of a factor may not be as important as its productivity. d. scientists disagree over the method by which to compute "share.