Every dollar added to the total reserves of the commercial banking system
A) compels the banks to reduce their loans by more than a dollar.
B) compels the banks to expand their loans by more than a dollar.
C) enables the banks to expand their loans by more than a dollar.
D) enables the banks to expand their loans by one dollar.
E) is one less dollar in the hands of the public.
C
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All recessions are due to external shocks
Answer the following statement(s) true (T) or false (F)
Monetarists think that the Fed should use ________ as a target when conducting monetary policy
A) the inflation rate B) the Treasury bill rate C) the money supply D) the federal funds rate E) the unemployment rate
Inflation that is higher than expected transfers resources from...
What will be an ideal response?
Firms that are "breaking even" are
A. earning zero economic profits. B. shutting down in the short run. C. earning less than a normal rate of return. D. All of the above are correct.