Suppose the required reserve ratio is 10%. A $75 million cash deposit will allow commercial banks to create at most
A. $750,000.
B. $7.5 million.
C. $75 million.
D. $750 million.
Answer: D
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A key international institution that plays an important role in exchange rate determination is the
A) U.S. Currency Board. B) European Central Bank. C) World Bank. D) International Monetary Fund.
An ideal cost-of-living index measures:
A) The relative cost of maintaining a particular utility level. B) The relative changes in consumer satisfaction that arise from price increases. C) The relative price of those goods that are considered to be necessities in consumption. D) none of the above
Which of the following is a function of the lender of last resort?
a. Keeping the velocity of money at a low level b. Reducing the supply of money and loans in an economy c. Providing short-term emergency loans in conditions of financial crisis in an economy d. Increasing the supply of money and the quantity of loans in an economy
Fiscal policy is the use of taxes and spending by the government to affect aggregate demand.
Answer the following statement true (T) or false (F)