The banking system currently has $10 billion of reserves, none of which are excess. People hold only deposits and no currency, and the reserve requirement is 10 percent. If the Fed raises the reserve requirement to 12.5 percent and at the same time buys $1 billion worth of bonds, then by how much does the money supply change?
a. It falls by $12 billion.
b. It falls by $19 billion.
c. It falls by $21 billion.
d. None of the above is correct.
a
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If the price of gasoline increases significantly, then we'd expect the demand curve for large hybrid and electric cars to
A. not shift, but there will be a movement along that demand curve. B. shift to the right. C. shift to the left. D. become upward-sloping.
One of the main reasons that explains why the Industrial Revolution started in Britain is that:
A) economic agents in Britain opposed creative destruction. B) Britain was a command economy. C) Britain had inclusive institutions. D) property rights were absent in Britain.
If GDP included the value of leisure time, the value of U.S. GDP would most likely increase
Indicate whether the statement is true or false
The basket of goods measured in computing the CPI includes goods produced in prior years and imported goods
Indicate whether the statement is true or false