Assuming all excess reserves are loaned out, if the reserve ratio is 40 percent, the money multiplier will be equal to:
A. 2.
B. 2.5.
C. 4.
D. 6.
Answer: B
You might also like to view...
The figure above shows the market for brooms. If 800 brooms are produced,
A) consumer surplus is maximized. B) producer surplus is maximized. C) market failure and a deadweight loss occur. D) marginal cost is less than marginal benefit. E) there is no deadweight loss.
Based on this graph, in most years there is a ______.
a. budget surplus
b. budget deficit
c. balanced budget
d. recessionary budget
Which of the following is a reason for the Keynesian view that monetary policy plays a minor role in affecting the economy?
A. The money demand curve is vertical. B. The investment curve is very steep. C. The money demand curve is horizontal at any interest rate. D. the monetary rule
A lower equilibrium interest rate:
A. increases saving, reduces total spending, and increases total output. B. decreases saving, increases total spending, and decreases total output. C. increases investment, increases total spending, and increases total output. D. decreases investment, decreases total spending, and increases total output.