Suppose checking deposits increase by $6,000 after all rounds of the money-creation process when the Fed buys $1,200 worth of U.S. government securities. This implies that the maximum value of the required reserve ratio is:
a. 5
b. 0.75.
c. 0.2.
d. 1.2.
e. 1.0.
c
You might also like to view...
Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
Which of the following is part of M2?
A) checks B) credit cards C) currency held inside a bank D) none of these are part of M1 or M2
You consume only steak and lobster. Your income effect from a drop in the price of lobster is measured by a movement along your indifference curve between steak and lobster
Indicate whether the statement is true or false
In what way does this map serve as an abstraction?
Zoom out to the highest level. How does this affect the level of abstraction? When would each type of map be most useful? Generalize this argument by discussing the level of abstraction needed for alternative economic models.