If the minimum reserve ratio is 20 percent, then $1 of reserves can support a maximum of $10 more in transactions deposits.
Answer the following statement true (T) or false (F)
False
In this case, $1 in deposits can support $5 in transactions deposits because the money multiplier is 5.
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The natural rate hypothesis states that
A) it is natural for the unemployment rate to be less than the natural unemployment rate. B) changes in the inflation rate temporarily change the natural unemployment rate. C) it is natural for the unemployment rate to exceed the inflation rate. D) only natural economic policies can bring a permanent reduction in the unemployment rate. E) changes in the inflation rate temporarily change the unemployment rate.
The net present value of $1,000 received one year from now will
a. increase with the interest rate. b. exceed $1,000 as long as the interest rate is positive. c. exceed the net present value of $1,000 to be received two years from now. d. equal $1,100 if the current interest (discount) rate is 10 percent.