There is an inverse relationship between the required reserve ratio and the money supply
Indicate whether the statement is true or false
True
You might also like to view...
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and real GDP in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls and real GDP falls. b. The quantity of real loanable funds per time period falls and real GDP rises. c. The quantity of real loanable funds per time period rises and real GDP remains the same. d. The quantity of real loanable funds per time period and real GDP remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Ben is exhausting his money income consuming products A and B in such quantities that MUa/Pa = 5 and MUb/Pb = 8. Ben should purchase:
A) more of A and less of B. B) more of B and less of A C) more of both A and B. D) less of both A and B.
Many economists believe that
A. once a negative income tax system was in place, the United States could increase economic equality indefinitely without reducing economic efficiency. B. a negative income tax would be less efficient than the current welfare system. C. replacing the current welfare system with a negative income tax would increase both economic efficiency and economic equality. D. None of the above is correct.