When a bank makes a loan by crediting the borrower's checking account balance with an amount equal to the loan:
A. the bank gains new reserves.
B. the Fed has made an open-market purchase.
C. money is created.
D. the bank immediately loses reserves.
Answer: C
You might also like to view...
Which of the following is likely to cause a right shift in the supply curve for labor?
A) An increase in the population B) A decrease in the population C) An increase in the price of the final good that the workers produce D) A decrease in the price of the final good that the labor is used to produce
In the figure above, when production is 3 units with a price of $3, the producer surplus in this market equals
A) b + g. B) f + g. C) a + b + f + g. D) a + b + f + g + h + i.
Assume that disposable income equals $1000 and the mpc equals 0.6. If total consumption equal $800, then autonomous consumption is equal to
A) $0. B) $200. C) $800. D) $1000.
According to Milton Friedman, the reason there are two Phillips curves is because
A) the expected inflation rate is always higher than the actual inflation rate. B) wages are inflexible. C) prices are inflexible. D) the expected inflation rate does not instantaneously adjust to changes in the actual inflation rate. E) the expected inflation rate is equal to 1 minus the actual inflation rate.