If all banks are subject to a uniform 20% reserve requirement and demand deposits are the only form of money, a $1,000 open market purchase by the Fed would cause the money supply to
A. increase by $1,000.
B. decrease by $1,000.
C. decrease by $5,000.
D. increase by $5,000.
D. increase by $5,000.
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Suppose that, initially, the nominal interest rate is 6 percent and the inflation rate is 3 percent. If the inflation rate increases to 6 percent, what will be the new nominal interest rate?
A) 6 percent B) 1 percent C) 11 percent D) 9 percent
Which of the following is not a barrier to entry?
A. Legal restrictions B. Patents C. Large sunk costs D. Survivor rights
What is rent seeking? How does rent seeking affect the deadweight loss from monopoly?
What will be an ideal response?
In a Bertrand model, graphically, the intersection of all firms' best-response curves determines
A) the Nash equilibrium prices. B) the dominant strategy for each firm. C) the degree of product differentiation. D) the price of the market leader.