Suppose you found $5,000 hidden in your closet and deposited it in a demand deposit account at your bank. If the reserve requirement was 10 percent, the deposit would directly create ____ in excess reserves and ultimately lead to a ____ total increase in the money supply, if all banks in the system lend out 100 percent of their excess reserves
a. $500; $5,000
b. $4,500; $5,000
c. $4,500; $45,000
d. $4,500; $50,000
d
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Technological advancements that increase labor's productivity shift the labor supply curve to the right
Indicate whether the statement is true or false
If the price of inputs falls and the budget deficit rises due to an increase in government spending, then the:
a. Price index rises, and real GDP rises. b. Price index rises, and real GDP falls. c. Price index rises, and the change in real GDP is uncertain. d. Price index falls, and real GDP rises. e. Price index is uncertain, and real GDP rises.
Liquidity refers to
a. the ease with which an asset is converted to the medium of exchange. b. the measurement of the intrinsic value of commodity money. c. the measurement of the durability of a good. d. how many time a dollar circulates in a given year.
The main asset held by a central bank in its role as the bankers' bank is:
A. foreign exchange reserves. B. loans. C. securities. D. currency.