If the required reserve ratio is 20%, what is the simple deposit multiplier?
a. 20
b. 0.05
c. 5
d. 50
c. 5
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If the money multiplier is 3.5, a $10 billion increase in the monetary base
A) increases the quantity of money by $35 billion. B) increases the quantity of money by $2.86 billion. C) increases the quantity of money by $3.5 billion. D) increases the quantity of money by $10 billion.
Suppose that severe floods destroyed farms, homes, and businesses in the Midwest. Use the aggregate demand/aggregate supply model, to explain the changes you would expect to take place and the effects you would expect these floods to have on both output and prices. (Include both short-run and long-run effects.)
Monopolistic competitors have _______ rivals who produce _________ goods and services.
A. no; identical B. many; identical C. many; close substitute D. None of the choices are correct.
Some economists believe that a positive aggregate demand shock to an economy with large amounts of excess capacity and unemployment does NOT necessarily cause an increase in prices. Economists who adhere to this belief are followers of
A. supply-side economics. B. classical economics. C. Keynesian economics. D. Say's laws of economics.