Assume that the loans made by the Paris First National Bank contracted from $16 million to $12 million. If the legal reserve requirement was increased from 20 percent to 40 percent, how much would the money supply shrink?

In a fiduciary monetary system, the value of the money issued by a government is based on

A) the ability to convert it to some asset of value, like silver. B) the gold held in that government's vaults. C) public confidence in that currency's acceptability and predictability of value. D) its being made out of some material with a market value equal to a bill's face value.

In a reserve currency system (such as the Bretton Woods system or the European ERM), currencies peg to a reserve currency. As a result:

A) only the reserve currency country has monetary autonomy. B) all countries, other than the reserve currency country, have monetary autonomy. C) all countries have monetary autonomy. D) no country has monetary autonomy.