The money supply will increase by a multiple of the increase in bank reserves created by the central bank unless:
A. there is 100 percent reserve banking.
B. banks' desired reserve/deposit ratio is 0.20.
C. there is fractional reserve banking.
D. the public holds no currency.
Answer: A
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The actual division of a tax between buyers and sellers in a market is the excess burden of the tax
Indicate whether the statement is true or false
People choose to hold a larger quantity of money if
a. the interest rate rises, which causes the opportunity cost of holding money to rise.
b. the interest rate falls, which causes the opportunity cost of holding money to rise.
c. the interest rate rises, which causes the opportunity cost of holding money to fall.
d. the interest rate falls, which causes the opportunity cost of holding money to fall.
The Latin term "ceteris paribus" means:
A. that if event A precedes event B, A has caused B. B. that economics deals with facts, not values. C. other things equal. D. prosperity inevitably follows recession.
The period between the implementation of a policy and its intended result is known as
A. the recognition time lag. B. the political action lag. C. the data lag. D. the effect time lag.