Author Question: Suppose you found 1,000 hidden in your mattress and deposited it in a demand deposit account at your ... (Read 99 times)

mcmcdaniel

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Suppose you found 1,000 hidden in your mattress and deposited it in a demand deposit account at your bank. If the reserve requirement was 20 percent, the deposit would directly create ____ in excess reserves and ultimately lead to a ____ total increase in the money supply, if all banks in the system lend out 100 percent of their excess reserves.
 a. 800; 4,000
 b. 800; 5,000
 c. 1,000; 4,000
  d. 1,000; 5,000

Question 2

The introduction of a new currency is generally sufficient to achieve a permanent reduction in the inflation rate.
 a. True
  b. False
  Indicate whether the statement is true or false



jazzlynnnnn

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Answer to Question 1

b

Answer to Question 2

False



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