Explain why the simple deposit multiplier overstates the true deposit multiplier
What will be an ideal response?
The simple model ignores the role banks and their customers play in the creation process. The bank's customers can decide to hold currency and the bank can decide to hold excess reserves. Both of these will restrict the banking system's ability to create deposits. Thus, the true multiplier is less than the prediction of the simple deposit multiplier.
Economics
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Which of the following was NOT a creation of the Bretton Woods conference?
A) World Bank B) IMF C) IBRD D) WTO
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Personal income represents what households actually receive as income, while personal disposable income nets out of personal income taxes paid to federal, state, and local governments
Indicate whether the statement is true or false
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