Author Question: If the Bank of America lends 100 million and the reserve requirement is 10, the monetary base: a. ... (Read 108 times)

mydiamond

  • Hero Member
  • *****
  • Posts: 804
If the Bank of America lends 100 million and the reserve requirement is 10, the monetary base:
 a. Falls by 100 million.
  b. Falls by 10 million.
  c. Does not change.
  d. Rises by 100 million.
  e. Rises by 10 million.

Question 2

Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and the nominal value of the domestic currency in the context of the Three-Sector-Model?
 a. The real risk-free interest rate rises, and nominal value of the domestic currency falls.
  b. The real risk-free interest rate rises, and nominal value of the domestic currency remains the same.
  c. There is not enough information to determine what happens to these two macroeconomic variables.
  d. The real risk-free interest rate rises, and nominal value of the domestic currency rises.
  e. The real risk-free interest rate falls, and nominal value of the domestic currency falls.



mariahkathleeen

  • Sr. Member
  • ****
  • Posts: 337
Answer to Question 1

.C

Answer to Question 2

.D



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question


 

Did you know?

There are immediate benefits of chiropractic adjustments that are visible via magnetic resonance imaging (MRI). It shows that spinal manipulation therapy is effective in decreasing pain and increasing the gaps between the vertebrae, reducing pressure that leads to pain.

Did you know?

The first documented use of surgical anesthesia in the United States was in Connecticut in 1844.

Did you know?

The first oral chemotherapy drug for colon cancer was approved by FDA in 2001.

Did you know?

Anesthesia awareness is a potentially disturbing adverse effect wherein patients who have been paralyzed with muscle relaxants may awaken. They may be aware of their surroundings but unable to communicate or move. Neurologic monitoring equipment that helps to more closely check the patient's anesthesia stages is now available to avoid the occurrence of anesthesia awareness.

Did you know?

Signs and symptoms of a drug overdose include losing consciousness, fever or sweating, breathing problems, abnormal pulse, and changes in skin color.

For a complete list of videos, visit our video library