The Fed has set a uniform reserve requirement of 3 percent for all deposits in the U.S. banking system
a. True
b. False
Indicate whether the statement is true or false
False
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Rank the following goods from most elastic to least elastic: The Economic Way of Thinking (11th ed.), economics textbooks, textbooks
A) The Economic Way of Thinking (11th ed.), economics textbooks, textbooks B) The Economic Way of Thinking (11th ed.), textbooks, economics textbooks C) Economics textbooks, The Economic Way of Thinking (11th ed.), textbooks D) Textbooks, economics textbooks, The Economic Way of Thinking (11th ed.) E) None of the above.
The crowding-out effect suggests that
a. expansionary fiscal policy causes inflation. b. restrictive fiscal policy is an effective weapon against inflation. c. a reduction in private spending that results from higher interest rates caused by a budget deficit will largely offset the expansionary effects of the deficit. d. a tax reduction financed by borrowing will increase the disposable income of households and, thereby, lead to a strong expansion in aggregate demand, output, and employment.
Exhibit 19-3 Balance sheet of Tucker National Bank Assets Liabilities Required reserves$ 20,000 Checkable deposits$100,000 Excess reserves0 Loans 80,000 Total$100,000 Total$100,000 Assume all banks in the system started with balance sheets as shown in Exhibit 19-3 and the Fed made a $100,000 open market purchase. The result would be a(n):
A. $500,000 expansion of the money supply. B. $100,000 expansion of the money supply. C. $20,000 contraction of the money supply. D. infinite expansion of the money supply.
One way the government can boost the economy out of a recession is:
A. with public announcements telling the public to save their money. B. by increasing government spending. C. by setting price ceilings on most goods so people can afford them. D. None of these will help an economy in recession.