If there is 100 percent reserve banking, the money supply is unaffected by the proportion of the dollars that the public chooses to hold as currency versus deposits.
Answer the following statement true (T) or false (F)
True
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Wendy has to decide between taking a flight and driving to California. Air tickets cost $800 and will get her to California in 2 hours. If she decides to drive, she would need $300 worth of gasoline and 10 hours to reach her destination
Suppose that Wendy's opportunity cost of time is $20 per hour. Assuming that there are no other costs involved, use cost-benefit analysis to decide whether she should fly or drive to California. If Wendy has an important business meeting to attend and this increases her opportunity cost of time to $200 per hour, will her optimum decision change? Explain.
The behavior of regulators when trying to win approval for their actions from their entire constituency is best described by the
A) capture hypothesis. B) law of increasing social well-being. C) share-the-gains, share-the-pains hypothesis. D) marginal benefit pricing hypothesis.
If Italy can produce grapes at a lower opportunity cost than any other nation, Italy is said to have a(n) ________ in the production of grapes.
A. autarky B. absolute advantage C. comparative disadvantage D. comparative advantage
If inventory stocks are low and firms have enough capital and labor to support an output increase,
A. monetary and fiscal policy will be very effective. B. neither monetary nor fiscal policy will be effective. C. fiscal policy will be effective, but monetary policy will be ineffective. D. monetary policy will be effective, but fiscal policy will be ineffective.