An increase in the required reserve ratio
A. will decrease the money supply.
B. will increase the money supply.
C. will decrease the discount rate.
D. will not change the money supply.
Answer: A
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If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $800 billion, and excess reserves total $0.8 billion, then the money supply is ________ billion
A) $8000 B) $1200 C) $1200.8 D) $8400
Assume the required reserve ratio is 10 percent and the FOMC orders an open market sale of $50 million in government securities from member banks. If the oversimplified money multiplier is assumed, then the money supply will
a. increase by $500 million. b. increase by $100 million. c. decrease by $100 million. d. decrease by $500 million.
A new government study reveals that daily consumption of peanut butter increases life expectancy by 10 years. What will this do to the input markets for peanuts and peanut butter factory workers? Assuming bologna is a substitute for peanut butter, what will happen in the market for bologna factory workers?
Herbert Simon, one of the first social scientists to work at the boundary of economics and psychology, suggested that humans should be viewed not as rational maximers but as