When the required reserve ratio is changed,
a. the money multiplier is changed but the amount of excess reserves in the banking system is unchanged.
b. the money multiplier is unchanged but the amount of excess reserves in the banking system is changed.
c. the size of the money multiplier and the amount of excess reserves change in the opposite direction from the required reserve ratio.
d. the size of the money multiplier and the amount of excess reserves change in the same direction as the required reserve ratio.
e. neither the money multiplier nor the amount of excess reserves change.
c
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What would be an example of capital good?
A) Jeanette buys a new dress. B) The local driver's license office purchases a new digital camera and printer. C) Antonio, the manager of the local Taco Hut, purchases a new deep fryer. D) Apple sells computers to Japan. E) Rhianna gets a haircut.
What is the equilibrium price of a good or service?
What will be an ideal response?
Why does the LL schedule have a negative slope?
A) The economic stability loss from pegging to the area's currencies rises as the degree of economic interdependence rises. B) The economic stability loss from pegging to the area's currencies falls as the degree of economic interdependence rises. C) The economic stability loss from pegging to the area's currencies falls as the degree of economic interdependence falls. D) The economic stability loss from pegging to the area's currencies rises as the degree of economic activity increases. E) The economic stability loss from pegging to the area's currencies is constant, even as the degree of economic activity increases.
According to the interest rate effect, a decrease in the price level will
A) decrease the real value of money balances, which causes total planned real expenditures to increase. B) cause interest rates to fall, which generates an increase in borrowing, so that total planned real expenditures increase. C) lead to a decrease in net exports, which causes total planned real expenditures to decrease. D) increase the real value of money balances, which causes interest rates to increase, thereby reducing total planned expenditures.