The amount of assets that a bank must hold at all times is determined by the
a. banks' actual reserves
b. legal reserve requirement
c. actual reserve requirement
d. fractional reserve requirement
e. excess reserve requirement
B
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If labor and capital are substitutes in production, then an increase in the amount of capital will
a. reduce the total product associated with each quantity of labor. b. decrease the marginal product of labor. c. increase the marginal product of labor. d. have no effect on labor productivity.
Suppose the money supply is set to grow at 12%, real GDP grows at 4%, and the nominal interest rate on Aaa corporate bonds is 10%
Using the quantity theory of money and the Fisher equation, the expected real interest rate on Aaa corporate bonds should average A) -2%. B) 2%. C) 6%. D) 7%.
With the financial revolution in the late twentieth century and the resultant increase in the importance and complexity of risk management, it became essential for divisionalized firms to decentralize risk assessment
Indicate whether the statement is true or false
When the Fed conducts open-market purchases,
a. it buys Treasury securities, which increases the money supply. b. it buys Treasury securities, which decreases the money supply. c. it borrows money from member banks, which increases the money supply. d. it lends money to member banks, which decreases the money supply.