The money multiplier equals:
a. 1 / excess reserves.
b. excess reserves / loans.
c. required reserve ratio / excess reserves.
d. 1 / actual reserves.
e. 1 / required reserve ratio.
e
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Which function of money represents a measure for stating the prices of goods and services?
A) medium of exchange B) unit of account C) store of value D) means of payment
Professor Rush decides to quit teaching economics and opens a shoe store out at the mall. He gave up an annual income of $50,000 to open the store. A year after opening the shoe store, the total revenue for the year was $200,000
Rush's expenses were $30,000 for labor, rent was $18,000, and utilities were $1,200. He also had to purchase new shoes from manufacturers, at a cost of $60,000, which was financed by cashing in his savings of $60,000 that had been in a bank earning 8 percent per year. The normal profit from operating a shoe store in the mall is $20,000. Determine Professor Rush's total cost and economic profit.
If parking spaces on a college campus are scarce, with quantity demanded during the "peak" hours, from 8 a.m. to 11 a.m., far greater than the number of spaces, an economist would propose as an efficient solution,
a. lowering the parking fees during those hours to compensate students for the longer search time. b. charging the same parking fees during all hours of the school day. c. raising parking fees during the peak hours to encourage some students to schedule classes during other hours when parking fees are lower. d. hiring more security guards to patrol for illegal parkers.
Though many assets can be used as a store of value, money is a particularly attractive method to store value because
a. it increases in value as prices rise. b. its purchasing power does not decline when prices rise. c. it is the most liquid of all assets. d. it is backed by gold.