« previous next »

Author Question: If the currency drain ratio increases, the monetary base decreases. Explain whether the previous ... (Read 32 times)

Deast7027

  • Hero Member
  • *****
  • Posts: 538
on: Jun 29, 2018
If the currency drain ratio increases, the monetary base decreases. Explain whether the previous statement is correct or incorrect.
 
  What will be an ideal response?

Question 2

As the economy enters an expansion so that people's expected future incomes rise, there will be
 
  A) a decrease in the nominal interest rate.
  B) a leftward shift in the supply of loanable funds curve.
  C) an increase in the supply of loanable funds.
  D) a leftward shift in the demand for loanable funds curve.
  E) None of the above answers is correct.


pocatato

  • Sr. Member
  • ****
  • Posts: 333
Reply #1 on: Jun 29, 2018
Answer to Question 1

The statement is false. If the currency drain ratio increases, the money multiplier (and the quantity of money) decreases but the monetary base itself is unaffected.

Answer to Question 2

C


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Warfarin was developed as a consequence of the study of a strange bleeding disorder that suddenly occurred in cattle on the northern prairies of the United States in the early 1900s.

Did you know?

The average adult has about 21 square feet of skin.

Did you know?

Although the Roman numeral for the number 4 has always been taught to have been "IV," according to historians, the ancient Romans probably used "IIII" most of the time. This is partially backed up by the fact that early grandfather clocks displayed IIII for the number 4 instead of IV. Early clockmakers apparently thought that the IIII balanced out the VIII (used for the number 8) on the clock face and that it just looked better.

Did you know?

To maintain good kidney function, you should drink at least 3 quarts of water daily. Water dilutes urine and helps prevent concentrations of salts and minerals that can lead to kidney stone formation. Chronic dehydration is a major contributor to the development of kidney stones.

Did you know?

Cancer has been around as long as humankind, but only in the second half of the twentieth century did the number of cancer cases explode.

Functional MRI Scans These scans of human brains show localized average increases in neural activity Functional MRI Scans These scans of human brains show localized average increases in neural activity
Brian Drain Brian Drain
Ratio of College Wages to High-School Wages Ratio of College Wages to High-School Wages
Aging and Fluid, Electrolyte, and Acid-Base Homeostasis Aging and Fluid, Electrolyte, and Acid-Base Homeostasis
Suppose the market supply curve is p = 5Q. If price increases from 10 to 15, the change in ... Suppose the market supply curve is p = 5Q. If price increases from 10 to 15, the change in ...
Polyploidy increases fruit size Polyploidy increases fruit size
Video: How do the different types of chromatography work? (No Audio)

For a complete list of videos, visit our video library