Assuming that households do not change their cash holdings and banks loan out all of their excess reserves, if the required reserve ratio (RRR) is 10 percent and the Fed purchases $2,000 worth of bonds from banks, how much money will be eventually created?

a. $1,800
b. $2,000
c. $9,000
d. $18,000
e. $20,000


E

Economics

You might also like to view...

Based on this figure, if the krone exchange rate is fixed at $0.09 dollars per krone, the krone is ________. 

A. revalued B. overvalued C. devalued D. undervalued

Economics

Assuming capital and labor are substitutes, an improvement in technology that affects only the productivity of capital would cause a firm to employ more capital but leave the amount of labor employed unchanged

Indicate whether the statement is true or false

Economics

The worst and most difficult to extract resources are used first

a. True b. False Indicate whether the statement is true or false

Economics

In which of the following examples are property rights not well established?

a. Carmen smokes a cigarette outside the door to her office building. b. Carlita stocks shelves in a grocery store. c. Cameron watches a movie in his home theater room. d. Cathy docks her boat at her lake house.

Economics