If the legal reserve requirement is 10 percent, $1,000 cash deposited into a demand deposit account will generate, assuming willing borrowers, an increase in the money supply of
a. $900
b. $1,100
c. $9,000
d. $10,000
e. $11,000
C
You might also like to view...
If you gave your friend a gift of a corporate bond, such as a $100 General Motors bond, your friend would have a gift of
a. M1 money b. M2 and fiat money c. specie d. near money e. not money
Environmental problems occur exclusively in capitalist economies
a. True b. False Indicate whether the statement is true or false
The payroll tax appears to be a proportional tax. In reality it is
a. highly progressive. b. actually proportional. c. highly regressive. d. regressive on low-income persons and progressive on high-income persons.
Which of the following might explain a decrease in national saving when the tax rate on savings is reduced?
a. its substitution effect on saving and its effect on the government budget b. its substitution effect on saving but not its effect on the government budget c. its effect on the government budget but not its substitution effect on saving d. neither its substitution effect on saving nor its effect on the government budget