The banking system currently has $200 billion of reserves, none of which are excess. People hold only deposits and no currency, and the reserve requirement is 4 percent. If the Fed raises the reserve requirement to 10 percent and at the same time buys $50 billion worth of bonds, then by how much does the money supply change?
a. It rises by $600 billion.
b. It rises by $125 billion.
c. It falls by $2,500 billion.
d. None of the above is correct.
c
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Trade with the United States during the late 19th and the first half of the 20th century benefited those individuals living in less developed countries by
(a) Boosting their incomes. (b) Restricting markets. (c) Exploiting their resources. (d) Increasing pollution and crime.
Less-risky professions tend to enjoy compensating wage differentials
a. True b. False
Which of the following is the best example of an intermediate good?
A. A new highway B. The commission that goes to a real estate agent C. Wax purchased by a candle company D. Wheat sold to a foreign country
The investment demand curve will shift to the right as a result of a(n):
a. Decrease in the acquisition and maintenance cost of capital goods b. Increase in the excess productive capacity available in the industry c. Increase in taxes businesses pay to government d. Decrease in the confidence of business leaders about the economy