Which of the following will limit the money creation process to an amount less than the potential amount?
a. bank pursuit of profits
b. increase in currency holdings by the public
c. business demand for loans
d. increased use of credit cards
B
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If the MPC = .75, the spending multiplier is:
a. 4. b. 5. c. 1.33. d. 1.20. e. .25.
The slower the rate of capital formation: a. the greater the rate of economic growth
b. the slower the rate of economic growth. c. the greater the rate of population growth. d. the slower the rate of growth of the money supply.
If $1 was equivalent to 120 Japanese yen in 2008 and 125 Japanese yen in 2010, it implies in 2010, there was:
a. a depreciation of the dollar against the yen. b. a depreciation of the yen against the dollar. c. an appreciation of the yen against the dollar. d. no change in the value of yen, but the dollar had weakened. e. no change in the value of dollar, but the yen had strengthened.
Developing countries do:
A. compete with one another for foreign investment, and this competition reduces the benefits from foreign investment. B. not compete with one another for foreign investment, because they have sufficient domestic saving to finance their investment needs. C. not compete with one another for foreign investment, because they lack the infrastructure to attract it in the first place. D. compete with one another for foreign investment, but this competition is beneficial to developing countries because it insures a more efficient allocation of resources.