The supply of high-powered money is $100,000 and the money supply is $500,000. If every individual wishes to hold 5% of his or her deposits in the form of cash, then the bank reserve-holding ratio must be
A) 0.25 if banks have made all loans acceptable by the Federal Reserve requirements.
B) 0.20 if banks have not made all loans acceptable by the Federal Reserve requirements.
C) 0.17 if banks have not made all loans acceptable by the Federal Reserve requirements.
D) 0.16 for any of the legally required reserve amount.
D
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Why would a higher tax rate lower the government purchases multiplier? What does the tax rate have to do with the government purchases multiplier?
What will be an ideal response?
In cost-effectiveness analysis, constant cost studies:
a. are rarely used b. attempt to specify the output which may be achieved from a number of alternative programs, assuming all are funded at the same level c. are useless because they fail to adequately evaluate program benefits d. try to find the least expensive way of achieving a certain objective e. none of the above