Bank A receives a deposit of $40,000 . If the value of the money multiplier in the economy is equal to 5, the bank has to maintain a minimum reserve of:
a. $10,000.
b. $12,000.
c. $8,000
d. $9,000.
c
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How do the Fed's actions influence real GDP and how long does it take for real GDP to respond to the Fed's policy changes?
What will be an ideal response?
According to the theory of purchasing power parity, whenever a country's price level is expected to fall relative to another country's price level,
A) its currency's real exchange rate relative to the other country's currency should rise. B) its currency should depreciate relative to the other country's currency. C) its currency should appreciate relative to the other country's currency. D) its nominal interest rate should rise relative to the other country's nominal interest rate.
A net capital inflow occurs in open economies where investment is:
A. higher than national savings. B. lower than national savings. C. equal to national savings. D. higher than national spending.
Other things equal, ethanol made from corn becomes economically viable (as or less costly than using oil) when oil prices reach _____ or more per barrel
A. $60 B. $80 C. $100 D. $120