Refer to Table 9-5. The required reserve ratio is 10%. By how much could the banking system ultimately increase the money supply if all excess reserves are loaned out, people never withdraw cash, and all loan proceeds are spent?
A) $30 million
B) $70 million
C) $300 million
D) $700 million
Ans: D) $700 million
You might also like to view...
When the government sets a price floor which is above the equilibrium price
A) a surplus will develop. B) a shortage will develop. C) the equilibrium price will be maintained. D) a price ceiling will follow.
If it costs View Your World, a high-end window manufacturer, $26 per window to install a higher quality glass in its windows and consumers will pay an additional $15 per window for the improvement, which of the following is true?
A) View Your World should not install the higher quality glass because the marginal revenue from the quality enhancement exceeds the marginal cost. B) View Your World should install the higher quality glass because the marginal revenue from the quality enhancement exceeds the marginal cost. C) View Your World should install the higher quality glass because the marginal revenue from the quality enhancement is less than the marginal cost. D) View Your World should not install the higher quality glass because the marginal revenue from the quality enhancement is less than the marginal cost.