The reserve ratio is 10 percent. Depositors regularly keep 10 percent of their deposits as cash. If the Fed buys $1 million of U.S. government securities, excess reserves
A. increase by $810,000.
B. increase by $900,000.
C. increase by $800,000.
D. increase by $1 million.
Answer: B
You might also like to view...
The slowdown in the growth of real wages in the United States since 1973 is consistent with a concurrent:
A. slowdown in productivity gains. B. slowdown in the growth of the working age population. C. speedup in the rate of inflation. D. slowdown in immigration into the country.
Figure 4.4 illustrates the supply of tacos. A decrease in the supply of tacos is represented by a movement from
A) point a to point b. B) point c to point b. C) S0 to S1. D) S2 to S1.
Monopolists are able to price discriminate because
A) of differing willingness to pay among consumers. B) of differing price elasticities of supply. C) they have constant marginal cost. D) they have constant average cost.
A tradeoff between inflation and unemployment is shown directly by the __________ curve
A) Fisher B) Phillips C) Friedman D) aggregate demand