Suppose the banking system as a whole has $600 billion in deposits and $66 billion in reserves, with a reserve ratio of 11 percent. What happens to the stock of money if the Fed lowers reserve requirements by changing the reserve ratio to 10 percent?
Under the revised reserve requirements, banks are required to keep only $60 billion in reserves ($600 billion ? 0.10), giving them $6 billion ($66 billion - $ 60 billion) in excess reserves. Considering a money multiplier of 10, the move would permit an expansion in deposits of $60 billion, which represents a 10 percent increase in the stock of money, from $600 to $660 billion.
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The European Central Bank has its headquarter in
A) London. B) Berlin. C) Frankfurt. D) Paris. E) Brussels.
Which of the following would be included in the income approach to calculating U.S. GDP?
a. Wage and salary payments to U.S. workers b. Purchases of automobiles by households c. Government purchases of guns and tanks and bombs d. Purchases of new trucks by Federal Express e. Purchases of new tractors by farmers
According to Darity and Myers
A. black men are becoming increasingly marginal to our economy. B. the basic cause of poverty is welfare dependency. C. the best solution to poverty is the negative income tax. D. as our economy continues to expand, black poverty will decline.
What happened to the international gold standard during WWI?
A) It flourished, since no nation trusted the other nations' currencies. B) It was abandoned. C) It did not disappear but was weakened by a major decline in international trade. D) It was relegated to government control.