If people never withdrew money, how much money could the banking system create given a new amount of deposits, assuming that excess reserves were zero?
A) the amount of new deposits multiplied by the money multiplier
B) as much as the new deposits
C) zero
D) the amount of new deposits multiplied by the reserve ratio
A
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When the LM curve is vertically sloped, the __________ in income due to a change in the money supply will be __________ when the LM curve is positively sloped, but not vertical
A) decrease; greater B) decrease; smaller C) increase; greater D) increase; smaller
In the self-correcting AD-AS model, a point where the economy's long-run AS curve, short-run AS curve, and AD curve all intersect at a single point represents a point where: a. real GDP is equal to its full-employment level
b. the conditions of short-run equilibrium are fulfilled. c. the conditions of long-run equilibrium are fulfilled. d. all of the above. e. a and c, but not b.
In the regression model Y = a + bX + cZ , a test of the hypothesis that parameter c equals zero is
A. an F-test. B. a zero-statistic. C. a Z-test. D. a t-test. E. an R2-test.
The classical long-run aggregate supply curve is
A. vertical at a level of output below potential real GDP. B. upward sloping. C. upward sloping at the level of potential real GDP. D. vertical at a level of potential real GDP.