The monetary base is $1,000 billion and the money multiplier is 5.5. What is the size of the money supply?
What will be an ideal response?
Monetary base x money multiplier = $1,000 billion x 5.5 = $5,500 billion.
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The demand for the Franconian franc in the foreign exchange market equals 14,000 - 3,000e and the supply of francs in the foreign exchange market equals 2,000 + 2,000e, where e is the nominal exchange rate expressed in U.S. dollars per franc. If the franc is fixed at 2 U.S. dollars per franc, then to maintain this fixed rate Franconia's international reserves must:
A. decrease by 4,000 dollars per period. B. increase by 4,000 dollars per period. C. decrease by 2,000 dollars per period. D. increase by 2,000 dollars per period.
If the Fed carries out an open market operation and sells U.S. government securities, the federal funds rate ________ and the quantity of reserves ________
A) falls; decreases B) rises; increases C) rises; decreases D) rises; does not change E) falls; increases
If a firm can produce a product at a lower average cost than its competitors, it stands a better chance of earning economic profit
Indicate whether the statement is true or false
In the above table, the marginal propensity to save when disposable income changes from $1,000 to $2,000 is
A) 0.1. B) 0.2. C) 0.8. D) -0.2.