For the money expansion process to produce the maximum potential multiplier effect
A. all loans from banks have to be redeposited throughout the banking system.
B. the Fed has to sell government bonds to back up the loans.
C. all loans of a given bank have to be deposited in that bank.
D. the required reserve ratio has to be 100 percent.
Answer: A
You might also like to view...
During the last two centuries, the average rate of growth of GDP per capita in the leading industrialized countries has averaged about _________ per year.
A. 2% B. 12% C. 22% D. 32%
If the quantity supplied increases by 8 percent when the price rises by 2 percent, the price elasticity of supply is ________
A) 10.0 B) 6.0 C) 0.25 D) 16.0 E) 4.0
If the wheat harvest next summer in Canada will be much less than had been expected, there will tend to be
A) a decrease in the price of wheat futures and an increase in the current cash price of wheat in the US. B) a decrease in the price of wheat futures and in the current cash price of wheat in the US. C) an increase in the price of wheat futures and a decrease in the current cash price of wheat in the US. D) an increase in the price of wheat futures and in the current cash price of wheat in the US.
Suppose over some period of time the money supply tripled, velocity doubled, and real GDP doubled. According to the quantity equation the price level is now
a. 6 times its old value. b. 3 times its old value. c. 1.5 times its old value. d. 0.75 times its old value.