Give an equation that shows the relationship between excess reserves, maximum checkable-deposit expansion, and the monetary multiplier.
What will be an ideal response?
The maximum deposit expansion = excess reserves times monetary multiplier; or symbolically, D = E times m where D is the maximum potential deposit expansion, E is excess reserves, and m is the monetary multiplier.
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Which fundamental economic question is most closely related to the issues of income distribution and poverty?
a. The What to Produce question. b. The Why to Produce question. c. The How to Produce question. d. The For Whom to Produce question.
_____ is the primary reason that explains why some nations are richer than the others
a. A democratic government b. A strong judicial system c. Access to education d. Private ownership e. A stable currency
Most firms are not monopolies in the real world because
a. firms usually face downward-sloping demand curves b. supply curves slope upward c. price is usually set equal to marginal cost by firms d. monopolies are not efficient e. there are substitutes for most goods
To measure how productive workers in the economy are, the best measure to use would be
a. real GDP. b. GDP divided by the population. c. GDP divided by the nation's capital stock. d. GDP divided by hours worked.