The money supply will increase by a multiple of the increase in bank reserves created by the central bank unless:
A. banks' desired reserve/deposit ratio is 0.20.
B. there is fractional reserve banking.
C. there is 100 percent reserve banking.
D. the public holds no currency.
Answer: C
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What will be an ideal response?
Under a rule of reason approach, an act is illegal:
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The farmers in Country A harvest and sell 150 tons of rice at the price of $80 per ton. Of the total produced, 30 tons are exported. If the government bans all exports of rice, the domestic price of rice would drop to $60. But the production and sales would also drop to 120 tons. How much loss would the domestic farmers incur due to the export ban? Use a graph to illustrate your answer.
What will be an ideal response?
The largest component of GDP is:
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