Each bank can lend an amount equal to its total reserves and no more.
Answer the following statement true (T) or false (F)
False
The bank can lend only a fraction of its total deposits because the Fed requires it to hold some as reserves.
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
According to Keynes, the key difference between money and bonds is that
A) money is an asset. B) bonds are an asset. C) money is less risky. D) bonds are tax exempt.
The dual-control approach refers to
a. dual trading programs, one for sulfur dioxide and one for nitrogen oxides b. different standards used in PSD areas versus nonattainment areas c. the netting program and the offset program d. state control of existing sources and federal control of new or modified sources
Individuals' expectations of lower future prices is a
A) rightward shifter of the AD curve. B) leftward shifter of the AD curve. C) reason for moving up along a given AD curve. D) reason for moving down along a given AD curve.