To reach the maximum money multiplier, it is assumed that
A. all loans get redeposited in a checkable account.
B. commercial banks keep the amount of reserves equal to total bank deposits.
C. loans are diverted into circulating currency.
D. there is insufficient loan demand.
Answer: A
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Which of the following explains why two firms, Apex and Bongo, would engage in implicit collusion, rather than explicit collusion?
A) Implicit collusion always has an enforcement mechanism that forces both firms to collude; explicit collusion does not have an enforcement mechanism. B) Implicit collusion is less costly to both firms than explicit collusion; therefore, profits will be greater for both firms if they engage in implicit collusion. C) Implicit collusion allows Apex to increase its profits at the expense of Bongo without Bongo knowing that collusion has occurred; if Apex engages in explicit collusion, Bongo will realize collusion has taken place and retaliate against Apex. D) explicit collusion is illegal; if the managers of Apex and Bongo engage in implicit collusion they may be within the law.
If the government did not provide and subsidize education:
A. parents would acquire less education for their children than is efficient because some of the benefits of education are private and some are social. B. parents would acquire the efficient quantity of education for their children, because all of the benefits of education are private. C. no children would receive an education because the benefits of education are public goods. D. the education market would reach efficiency.
Which of the following is an example of a horizontal merger?
A) Northeastern Illinois University merging with McDonald's. B) Northeastern Illinois University merging with a training academy for new professors. C) Northeastern Illinois University merging with Roosevelt University. D) Northeastern Illinois University going from a public to a private university.
In 2012, Trailblazer Bicycle Company produced a mountain bike that was delivered to a retail outlet in November 2012. The bicycle was sold to E.Z. Ryder in March 2013. This bicycle is counted as:
A. consumption in 2012 and as negative investment in 2013. B. negative investment in 2012 and as consumption in 2013. C. negative investment in 2012 and as investment in 2013. D. investment in 2012 and as negative investment in 2013.