If the required reserve ratio, m, is 20 percent, then the oversimplified money multiplier is
A. 10
B. 5
C. 4
D. 2
Answer: B
You might also like to view...
Which of the following scenarios would tend to raise the value of the U.S. dollar in foreign exchange markets?
A. An increase in the U.S. demand for foreign oil B. A rise in U.S. interest rates C. Enactment of contractionary fiscal policy in the United States D. Enactment of easy monetary policy in the United States
Which of the following statements is NOT true regarding subsidies?
A. Subsidies are like taxes in that they create deadweight loss. B. Subsidies are like taxes in that they reduce sales of the subsidized good. C. Subsidies are unlike taxes in that they increase sales of the subsidized good. D. Subsidies are unlike taxes in that they reduce the price that buyers pay for a good.
In the open-economy macroeconomic model, if the supply of loanable funds shifts right, then
a. the supply of dollars in the market for foreign-currency exchange shifts left. b. the supply of dollars in the market for foreign-currency exchange shifts right. c. the demand for dollars in the market for foreign-currency exchange shifts left. d. the demand for dollars in the market for foreign-currency exchange shifts right.
If planned aggregate spending in an economy can be written as PAE = 15,000 + 0.6Y ? 20,000r, and potential output equals 34,000, what real interest rate must the Federal Reserve set to bring the economy to full employment?
A. 3 percent B. 7 percent C. 6 percent D. 5 percent