Use the simple deposit multiplier to help show why the money supply increases when the Fed lowers the required reserve ratio (r)
The used to determine the simple deposit multiplier is: 1/r. As the required reserve ratio is reduced, the simple deposit multiplier would rise.
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If a security pays $55 in one year and $133 in three years, its present value is $150 if the interest rate is
A) 5 percent. B) 10 percent. C) 12.5 percent. D) 15 percent.
Which of the following offers an example of structural unemployment?
a. The rise in unemployment for stable workers after the development of gasoline-powered automobiles and the resulting long-term decline in horse-and- buggy transportation. b. The rise in unemployment among farm workers after harvest. c. The unemployment associated with workers changing jobs. d. The increase in unemployment during recessions.
Ceteris paribus, a downward shift in the net exports function will cause:
a. equilibrium real GDP to decrease. b. equilibrium real GDP to increase. c. savings to decrease. d. net exports to increase. e. government budget deficit to decline.
What is the flypaper theory of tax incidence? This theory is typically wrong. Why?