The amount that a commercial bank can lend is determined by its:
A. required reserves.
B. excess reserves.
C. outstanding loans.
D. outstanding checkable deposits.
B. excess reserves.
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There is an inverse relationship between the quantity of money demanded and the interest rate. True or False
Suppose the economy's production function is Y = AK0.3N0.7. If K = 2000, N = 100, and A = 1, then Y = 246. If K and N each increase by 5 percent, and A is unchanged, by how much does Y increase?
A) 5% B) 10% C) 15% D) 20%
A rightward shift of the money supply ________
A) may come about from an increase in the quantity of money supplied by the Federal Reserve B) may come about from a decrease in the price level C) leads to a decrease in interest rates ceteris paribus D) all of the above E) none of the above
Warren always carries a one hundred dollar bill in case of emergencies. This is an example of the
A) precautionary demand for money. B) asset demand for money. C) transactions demand for money. D) wealth demand for money.