Author Question: If the reserve ratio is designated by r, the amount of deposits a bank can hold as excess reserves ... (Read 96 times)

mydiamond · **on:** Jun 30, 2018

If the reserve ratio is designated by r, the amount of deposits a bank can hold as excess reserves is equal to 1 / (1 - r).

Indicate whether the statement is true or false

Question 2

Which of the following statements is true?

A) An overvalued domestic currency encourages exports.
B) A country can keep its currency overvalued against the dollar as long as its dollar reserves last.
C) A country can keep its currency overvalued against the dollar as long as it can print its own currency.
D) An undervalued domestic currency encourages imports.