There is $5,000,000 of currency in Econland, all held by banks as reserves. The public does not hold any currency. If the banks' desired reserve/deposit ratio is 0.25, then the money supply equals:
A. $20,000,000
B. $10,000,000
C. $6,250,000
D. $5,000,000
Answer: A
You might also like to view...
Which of the following is likely to increase the elasticity of demand for a good?
A. A decrease in the price. B. A decrease in the availability of close substitutes. C. A longer period of time. D. A smaller share of income designated for the good in question.
Which of the following was not one of the likely causes of the productivity problem of the 1970s?
A. an increase in research and development spending B. a reduction in government regulation C. rapid growth in investment spending D. all of the above
Identify four reasons for high entry barriers. Briefly explain each reason
What will be an ideal response?
The production of cigarettes is highly automated; however, a worker is required to monitor each machine. Machines and workers do not interact with one another. Given this information, there are most likely
A) economies of scale. B) economies of scope. C) constant returns to scale. D) increasing returns to scale.