Which of the following sets the legal minimum reserve ratio?
A. The Federal Reserve.
B. Congress.
C. The U.S. Treasury.
D. The commercial banks.
Answer: A
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Inflation decreases the growth of capital because
i. when the after-tax real interest rate falls, savings decreases. ii. velocity increases when inflation increases. iii. the higher the inflation rate, the higher is the true income tax rate on income from capital. A) i only B) ii only C) iii only D) i and iii E) i, ii, and iii
The narrowest definition of money is called ________
a. "L" money b. M2 c. M1 d. time deposits
Figure 7-10
depicts a demand curve with a price elasticity that is
a.
unitary, implying that a percent change in price leads to an equal percent change in quantity demanded.
b.
perfectly inelastic, implying that the same amount will be purchased regardless of the price of the good.
c.
equal to zero.
d.
both b and c.
The government of Crossland wants to influence its exchange rate. It will do so by buying and selling:
A. commodities. B. transfers. C. goods and services from the current account. D. currencies in its official reserves.