Assuming that households do not change their cash holdings and banks loan out all of their excess reserves, if the required reserve ratio (RRR) is 20 percent and the Fed purchases $2,000 worth of bonds from banks, how much money will be eventually created?
a. $1,800
b. $2,000
c. $10,000
d. $18,000
e. $20,000
C
Economics
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Property rights often remain poorly defined because of _____
a. difficulty enforcing ownership once defined b. government fiat c. strong incentives towards the status quo d. monopolies
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In the above figure, what is the profit-maximizing output and price?
A. 12, $10 B. 10, $8 C. 10, $10 D. 8, $7
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