The money creation formula is oversimplified because it assumes that
a. every recipient of a bank loan will redeposit the proceeds in another bank.
b. loan recipients will not take any of the proceeds in cash.
c. every bank lends out all excess reserves.
d. All of the above are correct.
d
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Suppose that the production function for the economy is: Y = AK1/4L3/4. Assume that A = 1,000, the capital stock is $32,000 billion, and the labor force is 120 million (or 0.120 billion) workers. The value of the marginal product of labor is
A) $14,290.17. B) $17,043.29. C) $20,451.95. D) $22,724.33.
One reason the Federal Reserve Board in Washington did not act as a lender of last resort during the early years of the Great Depression, was its power struggle with ____
a. U.S. Treasury b. foreign central banks c. Federal Reserve Bank of New York d. President Roosevelt
Managers of profit centers earn more when their divisions
a. increase their sales and increase their costs b. decrease their sales and increase their costs c. decrease the costs of the components for which they are responsible d. increase the costs of the components for which they are responsible
If the quantity of cookies purchased decreases by 30 percent as the result of a 15 percent increase in the price of oranges, the absolute value of the price elasticity of demand for cookies is
a. 0.25. b. 0.50. c. 1.25. d. 2.0.