The required reserve ratio in an economy is 16 percent. If two banks, Bank A and Bank B, receive deposits of $50,000 and $75,000 . respectively, then the value of the money multiplier in the economy is:
a. 10.00.
b. 12.50.
c. 6.25

All of the following actions were taken by the Thai government to help Thailand maintain its peg against the dollar in the 1990s except

A) imposing restrictions on exports to the United States to prevent too many dollars from entering the economy. B) borrowing dollars from the International Monetary Fund in exchange for baht. C) increasing domestic interest rates to attract more foreign investors. D) buying baht on the foreign exchange market to support higher demand for the baht.

The government budget constraint says that ________

A) the difference between spending and revenues must equal the amount of new bond issues B) increases in spending must be matched by increases in revenue C) interest on government debt must be paid before tax revenues are spent on goods and services or disbursed as transfer payments D) state and local governments, in aggregate, cannot spend more than the federal government