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Author Question: Suppose checking deposits increase by 6,000 after all rounds of the money-creation process when the ... (Read 57 times)

eruditmonkey@yahoo.com

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on: Jun 30, 2018
Suppose checking deposits increase by 6,000 after all rounds of the money-creation process when the Fed buys 1,200 worth of U.S. government securities. This implies that the maximum value of the required reserve ratio is:
 a. 5.
 b. 0.75.
  c. 0.2.
 d. 1.2.
 e. 1.0.

Question 2

In the income-expenditure framework, if planned aggregate expenditures are greater than real gross domestic product (GDP), _____.
 a. the price level will fall
 b. consumption will fall
 c. inventories will increase
 d. inventories will decrease
 e. consumption will decrease


mjenn52

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Reply #1 on: Jun 30, 2018
Answer to Question 1

c

Answer to Question 2

d


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