Imagine that Odyssey National is a brand new bank, and that its required reserve ratio is 10 percent. If it accepts a $1,000 cash deposit, then, excluding the $1,000 initial deposit, the banking system can increase the money supply by:
a. $900.
b. $910.
c. $1,000.
d. $9,000.
e. $10,000.
d
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The number of the countries of the world classified as a less developed country (LDC) is about:
a. 50. b. 75. c. 100. d. 150. e. 300.
All else equal, an increase in supply will cause an increase in consumer surplus
a. True b. False Indicate whether the statement is true or false
The nation of Isolani forbids international trade. In Isolani, you can exchange 1 car for 5 motorcycles. In other countries, you can exchange 1 car for 4 motorcycles. These facts indicate that
a. other countries have an absolute advantage, relative to Isolani, in producing cars. b. Isolani has a comparative advantage, relative to other countries, in producing cars. c. if Isolani were to allow trade, it would import motorcycles. d. the world price of motorcycles exceeds the price of motorcycles in Isolani.
If the MPC = 1, the spending multiplier is:
A. infinite. B. zero. C. 10. D. 1.