Suppose there was a banking crisis. The money supply would shrink by the greatest amount if the public ________ their currency-deposit ratio and the banks ________ their reserve-deposit ratio.
A. decreased; increased
B. increased; decreased
C. increased; increased
D. decreased; decreased
Answer: C
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Keynes (1941) claimed that government spending during wartime could generate a healthy increase in the demand for output, thus raising employment levels and boosting incomes
To avoid inflation, physical rationing, monetary measures and other controls were consequently needed. Indicate whether the statement is true or false
The decrease in the quantity of labor supplied due to the greater demand for leisure caused by a higher income is called the:
A. income effect. B. price effect. C. substitution effect. D. labor effect.
Suppose Katy Lucus maximized her total utility by buying different quantities of a variety of goods. Now suppose the price of one good rises. She then buys less of that good because the
a. MU/P of that good falls below the MU/P of other goods b. MU/P of that good rises above the MU/P of other goods c. marginal utility of that good diminishes d. total utility of that good diminishes e. marginal utility of that good rises
Economists speaking like scientists make
a. normative statements. b. prescriptive statements. c. claims about how the world is. d. claims about how the world should be.