Refer to the information provided in Scenario 25.1 below to answer the question(s) that follow.SCENARIO 25.1: The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank No. 1. Assume all banks are loaned up.
Refer to Scenario 25.1. What is the money multiplier in this economy?
A. 10
B. 16.67
C. 20
D. 50
Answer: C
You might also like to view...
Suppose the economy currently has an inflationary gap. The Fed engages in contractionary monetary policy. The impact of contractionary monetary policy will be to
A) increase short-run aggregate supply, decrease in prices and decrease in real GDP. B) increase short-run aggregate supply, decrease prices and increase real GDP. C) decrease aggregate demand, decrease prices, and increase real GDP. D) decrease aggregate demand, decrease prices, and decrease real GDP.
If the income elasticity of demand (YED) for a good is 0.9, then the good is:
(a) An Inferior good; (b) A Normal good; (c) A Luxury or Superior good; (d) The above information is incomplete and therefore no judgement is possible.
An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. ________ has the comparative advantage in TVs and ________ has the comparative advantage in radios.
A. Rich; Rich B. Rich; Jen C. Jen; Jen D. Jen; Rich
Total revenue minus total cost equals:
a) Marginal revenue. b) Variable costs. c) Profit. d) Economic costs.