If reserves in the banking system increase by $100, then checkable deposits will increase by $500 in the simple model of deposit creation when the required reserve ratio is
A) 0.01.
B) 0.10.
C) 0.05.
D) 0.20
D
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According to the efficient markets hypothesis, who should earn the highest risk-adjusted return on stocks?
A) a financial expert who can devote considerable time to research B) the average investor who doesn't do too much research C) someone throwing darts at possible stock picks D) all of the above should earn the same average return
The Keynesian explanation of the Great Depression focuses on
a. large rises in government spending. b. large increases in taxes c. large increases in planned investment. d. an increase in expectations.
A corporation may be reluctant to raise capital by issuing stock because
A. issuing stock to obtain money for investment is riskier than selling bonds. B. holders of already-existing stock will gain more voting power in the corporation. C. obtaining government permission to issue stock can be time-consuming and expensive. D. All of these responses are correct.
As a result of a decrease in the price of gasoline, consumers can afford to buy more gasoline for more driving trips. This is an illustration of
A. consumer sovereignty. B. the substitution effect. C. diminishing marginal utility. D. the income effect.