Suppose the Fed bought $150 million of U.S. securities from the public. The reserve requirement is 20 percent, and there are no initial excess reserves. A few weeks later, if the public's holdings of currency are constant and the banks have loaned all excess reserves, the money supply will increase by
a. $150 million.
b. $300 million.
c. $600 million.
d. $750 million.
D
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When a market is in equilibrium,
a. quantity demanded equals quantity supplied b. quantity demanded exceeds quantity supplied c. the demand curve is identical to the supply curve d. the economy must be at a point along the production possibilities frontier e. the law of demand is equivalent to the law of supply
The large number of bank failures in Texas and Oklahoma was related to a decline in the price of oil
Indicate whether the statement is true or false
The percentage of U.S. families below the poverty line is approximately
a. 5 percent b. 10 percent c. 25 percent d. 45 percent e. 65 percent
How much additional money will be created if you deposit a $200 check into your bank, which holds a 10% reserve ratio?
A. $200 will be created since your checking account balance has increased by $200 B. $180 since the bank will keep 10% of your $200 check in reserves and lend the other 90% C. $2,000 since the money multiplier will be equal to 10 and reserves have increased by $200 D. No money will be created since the $200 check does not represent an increase in reserves