Assume the desired reserve ratio is 10 percent, banks loan all excess reserves and the currency drain is zero. If the Fed sells $100 million of U.S. government securities to Boise Bank, the monetary base increases by
A) $1 million.
B) $10 million.
C) $100 million.
D) $1,000 million.
E) $90 million.
C
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Market power refers to the
a. firm's ability to control the industry's supply and demand b. joining of firms into a cartel c. firm's ability to control market price d. market's ability to control a firm's price e. industry's ability to control market price
A demand schedule relates prices of a particular good to quantities demanded
a. True b. False Indicate whether the statement is true or false
A person who believes the economy is self-regulating also believes that
A) when there is a surplus in the labor market, the wage rate falls, and when there is a shortage in the labor market, the wage rate rises. B) it is better if the economy is in an inflationary gap than a recessionary gap. C) prices are flexible but wages are not. D) the economy is always in long-run equilibrium. E) the real balance effect does not operate in a recessionary gap.
Suppose that income increases and the quantity demanded of guitars stays the same. This means that the income elasticity of guitars is unit elastic.
Answer the following statement true (T) or false (F)