Author Question: If the currency drain ratio increases, the monetary base decreases. Explain whether the previous ... (Read 82 times)

Deast7027

  • Hero Member
  • *****
  • Posts: 538
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
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
 

Did you know?

Medication errors are three times higher among children and infants than with adults.

Did you know?

ACTH levels are normally highest in the early morning (between 6 and 8 A.M.) and lowest in the evening (between 6 and 11 P.M.). Therefore, a doctor who suspects abnormal levels looks for low ACTH in the morning and high ACTH in the evening.

Did you know?

Bacteria have been found alive in a lake buried one half mile under ice in Antarctica.

Did you know?

About 3.2 billion people, nearly half the world population, are at risk for malaria. In 2015, there are about 214 million malaria cases and an estimated 438,000 malaria deaths.

Did you know?

Calcitonin is a naturally occurring hormone. In women who are at least 5 years beyond menopause, it slows bone loss and increases spinal bone density.

For a complete list of videos, visit our video library