The supply of high-powered money is $100,000 and the money supply is $500,000. If every individual wishes to hold 5% of his or her deposits in the form of cash, then the bank reserve-holding ratio must be

A) 0.25 if banks have made all loans acceptable by the Federal Reserve requirements.
B) 0.20 if banks have not made all loans acceptable by the Federal Reserve requirements.
C) 0.17 if banks have not made all loans acceptable by the Federal Reserve requirements.
D) 0.16 for any of the legally required reserve amount.


D

Economics

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In the classical macroeconomic model, a decrease in the real wage would cause

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