What is the required reserve ratio (RRR)?
(A) The ratio of commercial to personal loans that a bank makes.
(B) The amount of money a bank has to loan out.
(C) The portion of a deposit that a bank must keep on hand.
(D) The deposits that commercial companies make in banks.
Ans: (C) The portion of a deposit that a bank must keep on hand.
Economics
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Refer to Figure 13-4. Given the economy is at point A in year 1, what is the difference between the actual growth rate in GDP in year 2 and the potential growth rate in GDP in year 2?
A) 0.3% B) 1.1% C) 2.7% D) 3.7%
Economics
Assume the deposit expansion multiplier is 3.0. If the Treasury borrows $5 billion from the Non-bank public and spends it on the public, bank reserves will
A) rise by $5 billion. B) fall by $5 billion. C) rise by $15 billion. D) not change.
Economics