A reserve requirement of 10% implies a money multiplier of 10 and a reserve requirement of 15% implies a money multiplier of 15
a. True
b. False
Indicate whether the statement is true or false
False
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What effect does a price increase have on producers' total revenue?
What will be an ideal response?
Assume the marginal propensity to consume is 0.96 . Firms become pessimistic and decrease investment spending by $100 billion. Other things equal, real GDP will:
a. decrease by $100 billion. b. not change. c. decrease by $96 billion. d. decrease by $2,500 billion.
At any quantity, the price given by the supply curve shows the cost of the lowest-cost seller
a. True b. False Indicate whether the statement is true or false
The Fed engages in an expansionary money policy by ______ the money supply and ______ the interest rate.
a. decreasing; decreasing b. decreasing; increasing c. increasing; decreasing d. increasing; increasing