"If the currency drain increases, the monetary base decreases." Explain whether the previous statement is correct or incorrect
What will be an ideal response?
The statement is false. If the currency drain increases, the money multiplier (and the quantity of money) decreases but the monetary base itself is unaffected.
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Which of the following describes a firm?
a. Purchases labor hours from workers b. Borrows capital from investors c. Combines labor and capital to create production, moving them from their low value use to high value use d. All of the above
If both firms plan to be in business for one-year, the Nash Equilibrium will be
a. For each firm charge LP b. For neither firm to charge LP c. For one firm to charge LP and the other HP d. None of the above.
An increase in the money supply may __________ total expenditures, leading to a __________ shift of the AD curve
A) increase; rightward B) increase; leftward C) decrease; rightward D) decrease; leftward
________ involve the exchange of currency the second day after the date on which the two foreign-exchange traders agree to the transaction.
A) Spot transactions B) Outright forward transactions C) FX swaps D) Reverse transactions