Excess reserves equal
A) total reserves less required reserves.
B) required reserves less total reserves.
C) total reserves plus required reserves.
D) required reserves divided by total reserves.
A
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If the Fed buys a $100,000 government security from a bank when the desired reserve ratio is 20 percent and the currency drain ratio is 5 percent, the bank can loan a maximum of
A) $75,000. B) $85,000. C) $95,000. D) $80,000. E) $100,000.
In the quantity theory of money:
a. the price level is a function of the supply of money. b. the supply of money is a function of the price level. c. the money supply and the price level are inversely related. d. the money supply is controlled by the government.
Which of the following scenarios is consistent with the Laffer curve?
a. The tax rate is 1 percent, and tax revenue is very low. b. The tax rate is 1 percent, and tax revenue is very high. c. The tax rate is 99 percent, and tax revenue is very high. d. The tax rate is moderate (between very high and very low), and tax revenue is very low.
Activists hold that
A) activist monetary policy is flexible. B) nonactivist monetary policy is inflexible. C) the economy does not always return quickly enough to full-employment output. D) a and b E) all of the above