Which of the following would create the most money?
(A) The initial deposit is $3,000 and the required reserve ratio is 10 percent.
(B) The initial deposit is $7,500 and the required reserve ratio is 25 percent.
(C) The initial deposit is $4,500 and the required reserve ratio is 15 percent.
(D) The initial deposit is $6,500 and the required reserve ratio is 20 percent.
Ans: (D) The initial deposit is $6,500 and the required reserve ratio is 20 percent.
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One timing problem in using fiscal policy to counter a recession is the "legislative lag" that occurs between the
A. time the need for the fiscal action is recognized and the time that the action is taken. B. time fiscal action is taken and the time that the action has its effect on the economy. C. start of the recession and the time it takes to recognize that the recession has started. D. start of a predicted recession and the actual start of the recession.
If the government stops granting temporary work permits to foreign nationals, the demand for labor will ________, the supply of labor will ________, and the quantity of labor hired will ________
A) increase; decrease; decrease B) increase; decrease; remain the same C) remain the same; increase; decrease D) remain the same; decrease; decrease
According to this Application, what is home equity?
A) the difference between the value of homes and the amount of mortgage debt on the property B) the value of homes less the value of the property on which the homes are sitting C) the value of homes plus the value of the content in the homes D) the average retail value of homes listed for sale
The natural rate hypothesis asserts that
A) changes in the unemployment rate from changes in the inflation rate are temporary. B) changes in the unemployment rate are natural and long-lasting. C) when prices change, the inflation rate changes temporarily and then returns to its natural rate. D) changes in the natural unemployment rate are only temporary. E) price changes occur at a natural rate, near a 6 percent average inflation rate.