If the desired reserve-deposit ratio is 0.25 and the banking system receives an additional $10 million in reserves, bank deposits will increase by:
A. $40 million.
B. $4 million.
C. $10 million.
D. $250 million.
Answer: A
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What is the difference between nominal variables and real variables? Discuss the calculations undertaken to determine the real wage rate and the real interest rate. Explain why the real wage rate and real interest rate are real variables
What will be an ideal response?
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