Suppose that the Fed undertakes an open market sale, selling $3 million worth of securities to a bank. If the required reserve ratio is 11%, checkable deposits (or the money supply), would _______________ by ________________ million, assuming that there are no cash leakages and that banks hold zero excess reserves

A) rise; $27
B) decline; $33
C) decline; $27
D) rise; $33


C

Economics

You might also like to view...

Opportunity cost cannot be measured in money terms, only in conceptual terms.

Answer the following statement true (T) or false (F)

Economics

Which of the following is a bank liability?

A) reserves B) consumer loans C) nontransaction deposits D) securities

Economics

Under a negative income tax program,

A. the government guarantees a minimum level of family income. B. a family must pay income taxes on its welfare check. C. a family receives a stated amount of money from the government plus its members can keep all income earned through work. D. the government reduces the welfare payment by any income earned through work.

Economics

Which of the following will cause a movement along the demand curve for shoes?

A) an increase in the price of socks B) an increase in income C) an increase in the price of shoes D) all of the above

Economics