The required reserves of a bank are determined by multiplying the bank's checkable deposits by the required reserve ratio
a. True
b. False
Indicate whether the statement is true or false
True
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The money multiplier is the
A) fraction of the monetary base that is kept in currency. B) number of times that the Fed conducts open market operations in a month. C) factor by which a change in the monetary base is multiplied to give the change in the quantity of money. D) factor by which a change in the deposits base is multiplied to give the change in the monetary base. E) proportion by which a change in the quantity of money changes the monetary base.
Haiti was once heavily forested. Today, 80 percent of Haiti's forests have been cut down, primarily to be burned to create charcoal. The reduction in the number of trees has led to devastating floods when it rains heavily. This is an example of
A) the tragedy of the commons. B) tragic externalities. C) human greed. D) the consequences of too many people having private property rights.
A restrictive monetary policy, all else equal, will:
A) depreciate the domestic currency. B) appreciate the domestic currency. C) all of the above. D) none of the above.
The discount rate's main significance is that: a. changes in the rate are commonly viewed as a signal of the Fed's intentions with respect to monetary policy. b. changes in the rate are a sign that monetary policy has swung strongly in a new direction
c. it can be done quietly, without a lot of political debate or a public announcement. d. a small change in the rate can make a huge change in the number of dollars that are in excess reserves in banks all over the country.