When the legal reserve requirement is lowered,
a. the money multiplier increases, and the amount of excess reserves increases in the banking system
b. the money multiplier decreases, and the amount of excess reserves increases in the banking system
c. the money multiplier decreases, and the amount of excess reserves decreases in the banking system
d. the money multiplier increases, and the amount of excess reserves decreases in the banking system
e. there is no change in either the money multiplier or the amount of excess reserves in the banking system
A
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Which of the following would increase gross private domestic investment in an economy?
A) an increase in the level of Apple's inventory B) an increase in the shares of Apple stock households own C) an increase in the number of workers Apple hires D) an increase in the number of highway construction projects the government is funding
For simplicity, the IS model assumes that neither net exports nor net taxes vary with income. A more realistic (and complicated) model would drop such assumptions. How would the behavior of the IS curve differ in the more realistic model?
What will be an ideal response?
The assumption that the velocity of money and the quantity being produced is constant is held by the:
a. Keynesian school. b. supply-side school. c. neo-Keynesian school. d. rational expectations school. e. classical school.
Which of the following statement is false based on information presented in the textbook?
A) There is evidence of a shortage in the market for kidneys (for transplants). B) The waiting list for transplanted kidneys is used as a non-price rationing device. C) There is a price ceiling in the market for transplanted kidneys at a price of $0. D) In the market for transplanted kidneys the legal price is the same as the equilibrium price. E) ?It is currently unlawful to buy or sell kidneys at any positive price.