In the money and credit expansion process, the total change in checkable deposits is equal to the initial change in excess reserves _____
a. multiplied by the required reserve ratio
b. plus the change in required reserves
c. divided by the reciprocal of the required reserve ratio
d. multiplied by the reciprocal of the required reserve ratio
e. divided by the change in required reserves
d
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What happens when the price decreases in the case of a product that has elastic supply?
(A) Existing producers expand, and new producers enter the market. (B) Some producers produce less, and others drop out of the market. (C) New firms enter the market as older ones drop out. (D) Existing firms continue their usual output, but they earn less.
A key finding of the economic analysis of financial structure is that
A) the existence of the free-rider problem for traded securities helps to explain why banks play a predominant role in financing the activities of businesses. B) while free-rider problems limit the extent to which securities markets finance some business activities, nevertheless the majority of funds going to businesses are channeled through securities markets. C) given the great extent to which securities markets are regulated, free-rider problems are not of significant economic consequence in these markets. D) economists do not have a very good explanation for why securities markets are so heavily regulated.