If the Federal Reserve purchases $1 million in government securities in the open market, with a 25 percent required reserve ratio on deposits, the maximum increase in deposits would be
a. $4 million.
b. $10 million.
c. $25 million.
d. -$4 million.
e. none of the above
A
You might also like to view...
A outward shift of the aggregate supply curve could be caused by
A. higher import prices. B. lower import prices. C. energy shortages. D. rising wage rates.
An oligopoly between two firms is called
A) a biopoly. B) an oligopoly; there are no special terms used for oligopolies with different numbers of firms. C) a dual-firm oligopoly. D) a duopoly.
The marginal rate of substitution is determined by the slope of an indifference curve
Indicate whether the statement is true or false
Which of the following was a lesson from the 2007–2009 financial crisis?
A. The financial system needed more leverage in order to operate. B. The job of stabilizing the economy should be assigned exclusively to monetary policy. C. Monetary policy is finished once the Fed reduces the federal funds rate to zero. D. The business cycle still exists.