An increase in the reserve ratio
A) has an expansionary effect on the money supply.
B) has a contractionary effect on the money supply.
C) increases the money multiplier.
D) will cause banks to make more loans.
B
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A balance of payments crisis is best described as
A) a sharp change in interest rates sparked by a change in expectations about the level of imports. B) a sharp change in foreign reserves sparked by a change in expectations about the future exchange rate. C) a sharp change in interest rates sparked by a change in expectations about the level of exports. D) a sharp change in foreign reserves sparked by a change in expectations about the level of imports. E) a sharp change in foreign reserves sparked by a change in expectations about domestic production.
Suppose you are the manager of a large cardboard box industry. In the industry, there are 10 very large firms and 15 small firms. You are aware that the very large firms have a greater marginal benefit from industrywide advertising compared to the small firms. Which of the following payment plans is least likely to create discord across the participating firms?
A) Have each firm pay the exact same fee. B) Have each firm pay the average marginal benefit of industrywide advertising across all firms. C) Place the very large firms into Group 1 and the small firms into Group 2 and require the firms in each respective group to pay the same amount with the firms in Group 1 paying a fee that is greater than the fee paid by Group 2 firms. D) Place the very large firms into Group 1 and the small firms into Group 2 and require the firms in each respective group to pay the same amount with the firms in Group 1 paying a fee that is smaller than the fee paid by Group 2 firms.
Relative to developed economies, budget deficits are:
A. equally likely developing economies. B. politically less acceptable in developing countries. C. more likely in developing economies. D. less likely in developing economies.
In the summer of 2009, the United States federal minimum wage was raised to $7.25. According to theory, what will likely be the result of an increase in minimum wage?
A. All workers prior to the wage increase will now earn at least the minimum wage. B. Some workers will leave the labor market. C. Unemployment will increase as firms lay off workers. D. Firms will hire more workers.