The Fed makes an open market operation purchase of $200,000. The currency drain ratio is 33.33 percent and the desired reserve ratio is 10 percent. By how much does the quantity of money increase?

A) $800,000
B) $333,333
C) $2,000,000
D) $615,416
E) $465,116


D

Economics

You might also like to view...

The debt-to-GDP ratio decreases when the primary deficit ________ or when seigniorage ________

A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases

Economics

A good that has social costs that exceed private costs has a quantity that is

A) too high. B) too low. C) just right. D) the best society can do.

Economics

If there is an excess demand for money in the economy,

a. there is also an excess supply of money. b. there is also an excess demand for bonds. c. there is also an excess supply of bonds. d. the interest rate will fall. e. there is also an excess supply of housing.

Economics

With microfinance, the mechanism of peer lending is a way to avoid the problem of

A. a double coincidence of wants. B. the tragedy of the commons. C. imperfect information. D. capital flight.

Economics