If the reserve ratio is 10 percent and reserves in the commercial banking system increase by $10,000, the maximum possible expansion of demand deposits is
A) $90,000. B) $1,000,000. C) $10,000. D) $100,000.
D
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The figure above shows Sam's budget line. The vertical intercept of Sam's budget line is equal to
A) the quantity of coffee purchased if zero gasoline is purchased. B) Pc/Y. C) the quantity of gasoline purchased if zero coffee is purchased. D) Pg/Y.
If expected inflation declines by 2%, what should happen to nominal interest rates according to the Fisher effect?
A) rise by 2% B) fall by 2% C) be cut in half D) double in size
Productivity is ________
A) determined by central bank policy B) the combined effect of monetary and fiscal policy C) the residual component of the production function D) driven by changes in the rate of growth of output
The basic difference between macroeconomics and microeconomics is that:
a. microeconomics looks at the forest (aggregate markets) while macroeconomics looks at the trees (individual markets). b. macroeconomics is concerned with groups of individuals while microeconomics is concerned with single countries. c. microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets). d. macroeconomics is concerned with generalization while microeconomics is concerned with specialization.