Vault cash is equal to $8 million, deposits by depository institutions at the central bank are $2 million, the monetary base is $40 million, and bank deposits are $90 million. The money multiplier is equal to
A. 3.0.
B. 4.0.
C. 2.5.
D. 5.0.
Answer: A
You might also like to view...
The LM curve will become steeper when
a. there is a larger money demand increase per unit increase in income. b. money demand is less sensitive to the interest rate. c. money demand is more sensitive to the interest rate. d. Both a and b e. Both a and c
If the government cuts the tax rate, workers get to keep
a. less of each additional dollar they earn, so work effort increases, and aggregate supply shifts right. b. less of each additional dollar they earn, so work effort decreases, and aggregate supply shifts left. c. more of each additional dollar they earn, so work effort increases, and aggregate supply shifts right. d. more of each additional dollar they earn, so work effort decreases, and aggregate supply shifts left.
Which of the following is responsible for holding bank reserves?
A. The Federal Reserve Board of Governors. B. The 12 regional Federal Reserve banks. C. The Executive Branch of government. D. The Fed chairman.
Waldo works eight hours and produces 7 units of goods per hour. Emerson works six hours and produces 10 units of goods per hour
a. Waldo's productivity and output are greater than Emerson's. b. Waldo's productivity is greater than Emerson's but his output is less. c. Emerson's productivity and output are greater than Waldo's. d. Emerson's productivity is greater than Waldo's but his output is less.